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NBH Urges Caution on Volatile Inflation Outlook

HUNGARY
  • NBH comes out in line with expectations for cautious approach
  • Repeated need for safe buffer above zero rates
  • Volatile CPI outlook warrants caution
  • CPI expected to spike briefly to 4% in Spring 2021 due to increase in excise taxes on tobacco products & base effects
  • CPI likely to reach 3.5-3.6 % in 2021 before returning to around target in 2022
  • Risk aversion to EM still the largets risk to inflation
  • NBH remains prepared to boost asset purchases should the need arise
  • Repo funding will now be channeled through QE plan
  • NBH is ready to extend purchases to maturities of less than ten years, ensuring continuous liquidity over the middle segment of the yield curve
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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