National Bank of Hungary likely to keep interest rate on hold in April

Hungary’s consumer price inflation in the month of March surprisingly eased to 2.7 percent year-on-year from February’s 2.9 percent. However, the National Bank of Hungary is mainly concentrating on the core inflation. But the overall scenario does not change significantly as compared to the earlier months. Furthermore, the coming months might witness additional easing of consumer price inflation to even close to 2 percent year-on-year because of the base effect. Also, the headline inflation might come back to about 3 percent year-on-year in autumn.

Therefore, the National Bank of Hungary might not be in haste to reverse its monetary policy. Furthermore, there is an increasing possibility for additional cut of the cap of the three-month deposit, which might take place in June. But for the upcoming meeting on Tuesday, the National Bank of Hungary is expected to stand pat, according to a KBC Market Research report.