HUNGARY: NBH Say Underlying Inflation Was Strong in September

Highlights from the minutes of the NBH's October rate-setting meeting:

• [Members] emphasised that in addition to the strengthening of the forint observed during the year, the changes in investor and market sentiments would have to be closely monitored.
• When assessing domestic inflation developments, several Members pointed out that despite price and profit margin restriction measures, inflation was above the central bank tolerance band in September as well. Underlying inflation was strong.
• They also pointed out that maintaining the stability of the foreign exchange market was of key importance in mitigating inflation expectations.
• In the context of the October decision, the Monetary Council discussed one single option for decision, i.e. leaving the base rate unchanged.
• In the decision makers’ assessment, changing the forward guidance was not warranted. The Council agreed that in the current changing environment, a careful and patient approach to monetary policy remained necessary.
• In the Council members’ assessment, maintaining tight monetary conditions was warranted.

See the full release here.