Barnabás Virág: continued disciplined anti-inflation policy is justified
Global investor sentiment has been characterized by a high degree of uncertainty and volatility since the December interest rate decision, and a disciplined, anti-inflationary and cautious monetary policy is still necessary, said Barnabás Virág, Vice President of the Magyar Nemzeti Bank, on Tuesday, during an online background discussion following the meeting of the Monetary Council of the MNB.
According to his explanation, at the first meeting of the council this year, a single option was discussed and a unanimous vote was cast to maintain the interest rate level. Geopolitical tensions, the volatile financial market environment and the risks surrounding the inflation outlook justify the maintenance of tight monetary conditions, underlined Barnabás Virág.
The base rate has been unchanged for 4 months, and the possibility of an interest rate cut has been removed from the agenda, the Vice President said in response to a journalist’s question.
In the coming period, the results achieved in the areas of inflation and price stability will be guiding principles for the central bank, he said. In addition to the risk aversion towards emerging markets and the current inflation risk outlook, the base rate may remain at its current level for a longer period of time, he added.
According to his explanation, the volatility of global investor sentiment was mainly driven by geopolitical developments, news related to US tariff increases, and expectations regarding the future interest rate paths of major central banks.
The expected interest rate paths of major major economies are surrounded by significant uncertainty. Risk aversion towards emerging markets and the ongoing geopolitical tensions have increased the upward inflation risk in recent months, he emphasized.
He also mentioned that in December last year, domestic inflation and core inflation increased beyond analysts’ expectations, reaching the upper end of the central bank’s forecast range, at 4.6 percent.
Related news
Frost hits Hungarian orchards – season starts with price hike and supply shortage
As May marks the last month of spring and the…
Read more >Food inflation in Turkey slowed slightly in April
In Turkey, annual inflation slowed to 37.86 percent, the lowest…
Read more >Eurozone inflation rose slightly in April
Eurozone inflation in April was higher than expected and unchanged…
Read more >Related news
Dark patterns are spreading in e-commerce – and official action against them is also more frequent
Urging, pressuring, hiding costs or “trickling” them – dark patterns…
Read more >Corporate mergers at historic high – GVH works with faster procedures and artificial intelligence
A record number of corporate mergers took place in Hungary…
Read more >Frost hits Hungarian orchards – season starts with price hike and supply shortage
As May marks the last month of spring and the…
Read more >