Latest news with #NationalBankofHungary
Reuters
23-05-2025
- Business
- Reuters
Hungarian central bank to leave base rate steady again, eyeing CPI risks: Reuters poll
BUDAPEST, May 23 (Reuters) - Hungary's central bank will keep interest rates unchanged again next Tuesday, according to a Reuters poll that expects hardly any loosening in monetary policy through to the end of 2025, due to inflation risks. All 14 analysts surveyed between May 19 and 23 said the base rate would stay at 6.5% for the 8th straight month at the May 27 policy meeting as the National Bank of Hungary tries to cut inflation with an economic recovery much weaker than expected. The poll's median projection is for the base rate to inch down to 6.25% by the end of 2025. On Thursday, Hungary's central bank governor, Mihaly Varga, said inflation expectations must be anchored in order for the bank to reach its inflation target in a sustainable manner, adding the fight against inflation is "not yet over". The central bank left its benchmark base rate steady in a unanimous decision in April and said a careful and patient approach to monetary policy was still needed. Hungarian inflation exceeded 5% in the first two months of the year before retreating to 4.8% in March and 4.2% in April. "We expect the NBH to keep its base rate unchanged at 6.50% at its upcoming meeting on May 27 and to retain its cautious forward guidance for the key policy rate to remain at its current level for a prolonged period of time," Morgan Stanley economist Georgi Deyanov said in a note. "We expect the central bank to acknowledge the improving inflation outlook but continue highlighting elevated risks to it and to hint at potential downside revisions to both its GDP and inflation forecasts at the subsequent June core meeting." New governor Varga, Prime Minister Viktor Orban's former finance minister, has ruled out rate cuts for the foreseeable future despite the poor GDP growth outlook. The poll sees Hungary's economy growing by only 1% this year, below the central bank's latest forecast for 1.9% to 2.9% published in March. Standard & Poor's cut Hungary's credit rating outlook to negative from stable last month. Two other rating agencies, Moody's and Fitch, are both expected to review their assessment of Hungary's credit standing in the coming weeks.
Budapest Times
24-04-2025
- Business
- Budapest Times
Varga: New management of NBH is committed to achieving and maintaining price stability
Governor Mihály Varga said the new management of the National Bank of Hungary (NBH) is committed to achieving and maintaining price stability while improving the efficiency and practical application of the central bank's work. At a meeting of the Big Companies Club of the Budapest Chamber of Commerce and Industry (BKIK), Varga said the NBH would focus on the tasks in its legal mandate in future, while cooperating with economic and financial market players to support sustainable economic growth. He acknowledged the impact on Hungary's economic outlook of increasing uncertainty on global economic and financial markets amid the drawn-out war in Ukraine, the tariffs war and the stagnation of the German economy, and pointed to the emergence of recession and inflation risks. Although the strong foundations of the Hungarian economy give reason for optimism, Varga said the global tariffs war could affect macroeconomic developments in Hungary, noting that the central bank had put average annual CPI at 4.5pc-5.1pc and GDP growth at 1.9pc-2.9pc for 2025 in a forecast released in March. Varga said the NBH's new management would concentrate on strengthening the fulfillment of its basic tasks, increasing transparency and efficiency, while rationalising other tasks. He highlighted the central bank's recently established cooperation with the Hungarian Chamber of Commerce and Industry (MKIK) and an agreement with lenders on streamlined, more transparent and cheaper fees that would reduce retail banking costs and bring down inflation.
Budapest Times
31-03-2025
- Business
- Budapest Times
Gulyás: Government may have to raise pensions to match rate of inflation
Gergely Gulyás, the head of the Prime Minister's Office, said at a weekly press briefing on Thursday that the government may have to raise pensions by around 1.3pc in November to match the rate of inflation. Gulyás said that the government calculated an average annual inflation of 4.5pc in 2025. He said the government had allocated over HUF 90bn for the the resulting inflation-linked top-up which is required by law. The 1.3pc pension rise in November translates as HUF 39,600, in absolute terms, for the average pension, Gulyás said. He said that Mihaly Varga, the National Bank of Hungary's new governor, had presented the central bank's latest forecasts at the cabinet meeting. The central bank puts average annual inflation at 'at least' 4.5pc in 2025, he added. Gulyás said inflation could be better than expected with the rollout of a government-mandated cap on markups of some basic foods. The new measure has cut prices of 874 products by 17.5pc on average, he added.
Yahoo
25-03-2025
- Business
- Yahoo
Hungary Holds Key Rate With Focus Shifting to Varga's Guidance
(Bloomberg) -- Hungary held interest rates at the first policy meeting under Governor Mihaly Varga, with attention now shifting to the central bank's monetary-policy guidance. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Why Did the Government Declare War on My Adorable Tiny Truck? Chicago Transit Faces 'Doomsday Scenario,' Regional Agency Says LA Faces $1 Billion Budget Hole, Warns of Thousands of Layoffs Trump Slashed International Aid. Geneva Is Feeling the Impact. The National Bank of Hungary kept the benchmark rate unchanged at 6.5% on Tuesday, tied with Romania for the highest key interest rate in the European Union. The decision matched the estimate of all but one economist in a Bloomberg survey. Varga will speak an hour later, when new inflation forecasts will also be published. Annual price growth soared to a 15-month high of 5.6% in February, bolstering bets that little to no room remained for monetary easing this year. Even before Varga took over, the central bank said it planned to hike its inflation projections as soaring services and food costs lifted price-growth further away from policymakers' 3% goal. Inflation has become a political headache for Prime Minister Viktor Orban, whose party is trailing an upstart opposition movement with a year to go before the next elections and with campaigning dominated by an ongoing cost-of-living crisis. The government last week instituted a curb on retailers' profit on some 30 food staples to stem inflation. The average price of affected products dropped by almost 18% on average since the intervention started, Economy Minister Marton Nagy said Tuesday. Varga, who was Orban's longtime finance minister, took over the central bank this month, vowing to prioritize price stability and to maintain tight monetary policy. The central bank has kept the key rate unchanged for the past five months. Money market traders see only a slight chance of an interest rate cut this year, according to forward rate agreements. They have even started wagering on a rate hike in the next three months. The hawkish monetary-policy rhetoric has helped support the forint, which has gained 3.5% against the euro this year, the biggest appreciation among emerging market peers after the Russian ruble. Policymakers have previously cited currency weakness as another risk factor for inflation, given the heightened pass-through for prices. Google Is Searching for an Answer to ChatGPT The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? A New 'China Shock' Is Destroying Jobs Around the World How TD Became America's Most Convenient Bank for Money Launderers Tesla's Gamble on MAGA Customers Won't Work ©2025 Bloomberg L.P. Sign in to access your portfolio
Budapest Times
14-03-2025
- Business
- Budapest Times
New NBH governor signs first banknote
Mihály Varga said Hungarian banknotes combined progress with tradition and stability, while adopting all of the latest cash technologies. Mihály Varga, the new governor of the National Bank of Hungary (NBH), signed a banknote issued by the central bank for the first time on Wednesday. According to MTI, Varga said Hungarian banknotes combined progress with tradition and stability, while adopting all of the latest cash technologies. He added that NBH banknotes were a sign of the central bank's independent monetary policy as well as its contract with economic actors. Varga said he would follow the principles of stability, independence and transparency in his new position. He added that the central bank would continue a disciplined and consistent monetary policy, supporting the sustainable growth of the Hungarian economy and strengthening the stability of the financial system. Under his leadership, Varga pledged the NBH would closely track every trend and risk, while delivering firm responses if those put the central bank's targets at risk. Varga noted that the law ensured the NBH's independence, but said that didn't imply isolation. He added that the NBH would cooperate with the government and financial institutions, in line with international practices and respecting the scope of responsibilities. Varga said the NBH's main focus would be on 'classic' central bank tasks contained in its legal mandate. He added that the NBH would scale back other activities, highlighting the importance of disciplined management and transparent operation. The NBH is 'no ivory tower', he said, adding that the central bank's analyses served the implementation of its programmes which supported policies strengthening confidence in the Hungarian financial system. Establishing a predictable investment environment is a key goal, he said, adding that price stability supporting the achievement of economic targets was in reach and could be sustained in the long term.
