Actual: 6.00 %
Consensus: 6.00 %
Previous: 6.00 %
Once again the Hungarian rates were kept unchanged, which was expected. While a 25 bps hike was discussed, an overwhelming majority voted for no change. The MNB said that its wait-and-see stance was justified and gave no indication on future rate outlook. However, it has mostly mentioned upside risks for inflation. The central bank expects inflation to fall back to target in 2013; the previous estimate was 1H 2013. The pace of disinflation is seen uncertain and one of the reasons is the weak forint. The currency weakness will pose new risks for inflation if sustained. The forint has got under pressure due to higher risk aversion on global markets. The MNB sees a good chance that the volatility will persist. It also said that rise of minimum wage is a concern as it may indicate a higher wage path.
Although domestic demand remains weak and downturn of the major economies weighs on the outlook, the upside risks for inflation start to prevail. However, we still prefer stable rates in coming months due to high uncertainty. The Eurozone´s efforts to contain debt crisis are changing situation on markets very quickly. Monetary policy should, therefore, be prudent and support market stability.