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NBH Reiterates Cautious Tone on EM Headwinds & CPI Risks; QE Maintained at HUF 60bn/wk

HUNGARY
  • HUNGARY CENTRAL BANK SAYS READY TO REACT TO CPI OUTLOOK CHANGES
  • EM HEADWINDS MAIN RISK TO CPI OUTLOOK
  • NEED TO BE `EXTRA CAREFUL' IN ASSESSING CPI TREND
  • NBH's balance sheet is of average size in regional comparison, and is ready to increase its further
  • QE to remain at HUF 60bn in line with Jan decision to reduce repo funding to HUF 10bn
  • 1 Week deposits to remain at 0.75% as expected in response to EM risk aversion and as long as warranted by inflationary risks
  • NBH will continue to apply a flexible approach to the amount of its weekly government securities purchases, increasing its direct purchases in the secondary market relative to the past
  • NBH will use its government securities purchase programme to the extent and for the time necessary by maintaining a lasting presence in the market, and it continues to consider it as a priority to increase the share of longer maturities within the maturity profile of government debt
  • FGS Go! Programme also to continue as expected
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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