National Bank talks about risk of a higher inflation, unanimously decides about base rate
Members of the Monetary Council of the National Bank of Hungary (NBH) voted unanimously to keep the central bank base rate on hold at a monthly policy meeting in February, the minutes released on Wednesday confirmed.
All nine of the Council’s members voted to keep the base rate at 6.50pc, which was the only proposal discussed at the meeting. “Generally, members were of the view that maintaining a restrictive monetary policy stance was still necessary, and positive real interest rates ensured the achievement of central bank targets,” according to the minutes.
The members reiterated their commitment to restarting disinflation as soon as possible and meeting the inflation target in a sustainable manner.
The members said that disinflation was expected to resume in the first quarter, but pointed to incoming data suggesting an increased risk of a higher inflation path. They stressed that anchoring inflation expectations was “crucial” to achieve sustainable price stability.
Hungarian government happy for state debt rise
The Government Debt Management Agency (ÁKK) sold HUF 70.0bn of securities at auction on Thursday, HUF 30.0bn more than planned. ÁKK sold HUF 60.0bn of discount twelve-month T-bills, double the original offer, after primary dealers bid for HUF 66.1bn of the securities. Average yield was 6.32pc, 12bp over the secondary market benchmark and 25bp higher than the yield at the previous auction of the bills two weeks earlier.
ÁKK sold HUF 10.0bn of 15-year bonds, in line with the original offer. Bids came to HUF 11.7bn. Average yield was 7.32pc, 7bp over the benchmark and 27bp over the yield at the previous auction of the bonds on January 16.
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