Hungarian central bank policy makers could weigh rate hike in June

The Monetary Council of the National Bank of Hungary (NBH) could consider raising the base rate at a policy meeting in June, deputy governor Barnabás Virág said on Monday, Reuters reported.

Virag said Hungary’s monetary policy would enter a new phase from June as the economy fully reopens, and the central bank would adjust short-term rates proactively to tackle rising inflation risks.

He said rate rises could precede any decision about asset purchases, and the NBH’s next quarterly Inflation Report, which the Monetary Council will discuss at the June policy meeting, would be critical in assessing risks.

“This will be a data-driven process, in several steps…and the possibility of a hike in the base rate is worth assessing already in June,” Virág told journalists.

He said the economy will rebound dynamically from the pandemic-induced shock, with GDP growth seen now closer to 6 percent this year, due to a strong rise in demand.