Hungary: Central Bank remains on hold
March 28, 2011
At its latest monetary policy meeting on 28 March, the Central Bank left the benchmark rate unchanged at 6.00%, in a decision broadly anticipated by the market. The move follows on a similar decision in February. As in previous meetings, the Bank maintained that inflation is ?expected to be considerably above the Bank's 3% target in the short term, due to significant cost-push shocks hitting the economy?. These shocks include rising international commodity prices and a windfall tax on energy, telecommunications as well as on large retail companies. However, the Bank indicated that inflation ?may fall back close to the target by the end of next year even without further monetary tightening?, suggesting that the Bank will continue with its wait-and-see approach in the months ahead.