Hungary: Central Bank leaves interest rates unchanged
May 16, 2011
At its monetary policy meeting on 16 May, the Central Bank left the benchmark interest rate unchanged at 6.00%, in a decision widely anticipated by the market. Monetary authorities have not changed interest rates since February, when they halted the tightening cycle. High commodity prices and a windfall tax on energy, telecommunications and large retail are pushing inflation higher. Nevertheless, the Central Bank maintains an optimistic mid-term inflation outlook. While the Bank acknowledges that inflation is ?expected to be significantly above the target in the short term, due to the cost-push shocks hitting the economy? it expects that inflation ?may fall back close to 3% by the end of next year even without further policy tightening.?