Hungary: Central Bank maintains monetary policy stance
August 23, 2011
At its 23 August policy meeting, the Central Bank decided to leave the benchmark rate unchanged at 6.00%, in a decision widely expected by the market. Monetary authorities last raised interest rates in January and have since left them on hold amid slowing inflation and a protracted economic recovery. The Central Bank maintained its view that inflation will fall back to its 3.0% target in the mid-term ?even without policy tightening, despite the cost shocks hitting the economy.? Moreover, the monetary authorities recognized that growth has disappointed on the downside, with evidence that global economic activity is moderating. Finally, the Bank stated that ?interest rate decisions may be influenced by the success of measures to solve the euro-area debt crisis, in addition to expected developments in domestic inflation.?