Hungarys central bank may raise rates further - minutes.

By bne IntelliNews January 12, 2012
The monetary council of Hungarys central bank is ready to further tighten the monetary policy by raising twice the base interest rate by 0.25pps each at the first two policy meetings in 2012, minutes from the latest rate-setting meeting showed. The central bank raised the base rate by 0.5pps to 7% on December 20. The central bankers broadly agreed on tightening the monetary stance, with 5 members in favour of a 0.5pps hike and 2 members backing a 0.25pps increase. According to the board members, the outlook for Hungarys economic growth had clearly worsened in the last months on 2011. The sharp deterioration in external demand conditions reflected an economic slowdown in the countrys main trading partners. At the same time, the outlook for consumption determining domestic demand was likely to be weak as a result of the governments austerity measures, the statement read. Under the banks projections, local economy is seen to stagnate (0.1% GDP growth) in 2012, while recovery is expected in 2013. The bank projects a 5% inflation in 2012, making a substantial upside revision of its September forecast that envisaged a 3.9% inflation, reflecting the upward cost pressures from the indirect tax increases and the substantial depreciation of the forint. However, some members of the council noted that declining household demand would have disinflationary effect. Finally, the central bankers welcomed the establishment of connections between the government and the IMF. The next policy meeting will be held on January 24.

Related Articles

Assets of Hungarys investment funds up 3.2% m/m in Feb 2013.

Hungary's investment funds had aggregate assets of HUF 3.657tn (EUR 11.98bn) as of end-February 2013, up by 3.2% m/m, MTI news agency reported citing data from the association of investment funds ... more

Hungary's number of employees down 0.6% y/y in Jan 2013.

The number of employees in Hungary's public and private sectors fell for the tenth straight month in January 2013 declining by 0.6% y/y to 2.574mn, the statistics office informed. The decline ... more

Hungarys MVM clears deal for purchasing E.ONs local units.

The assembly of state-owned Hungarian Electricity Works (MVM) has approved the purchase of the local gas business of German power utility E.ON, Hungary AM reported, citing local daily Magyar ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss