Hungary: NBH likely to keep all its policy rates on hold - TDS

Analysts at TD Securities suggest that in line with the unanimous consensus, they are expecting the NBH to keep all its policy rates on hold at today's Monetary Council (MC) meeting.

Key Quotes

“In April headline CPI inflation moved up to 3.9% Y/Y from a prior 3.7%, coming close to the top of the target band. However, the MC will take some comfort from the fact that core inflation ex indirect taxes, which they have said is their current policy focus, fell slightly to 3.4% Y/Y from 3.5%. EURHUF has been moving higher since the lows in March, but we don't think the MC will become concerned until it moves above the 330 level.”

“The statement will probably repeat the message that "persistently buoyant domestic demand is boosting, and weakening external activity is restraining the pace of price increase". We think that the NBH needs to tighten further and that could happen at the June meeting when the MC will have the latest inflation report to hand.”