POLL — Hungary's central bank seen pausing rate cuts at 5.5% as global risks cloud outlook
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?s=GCR01+46+D&st=Menu+G+C Reuters Hungary central bank rate forecasts * reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=HUCPIAP Reuters Hungary average inflation forecasts * reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=HUGDPAP Reuters Hungary GDP forecasts By Gergely Szakacs and Krisztina Than BUDAPEST, Sept 18 (Reuters) — Hungary's central bank is expected to keep its base rate on hold at 5.5% next Tuesday after three cuts in a row, taking a pause amid increased global risks and a planned lowering of its inflation goal, a Reuters poll showed on Friday. The National Bank of Hungary last month delivered its third successive quarter-point rate cut, as expected, to 5.5%, and left the door open to further rate easing depending on its September inflation projections and global market developments. However, on September 10 Governor Mihaly Varga struck a cautious tone, saying that despite steep falls in Hungary's inflation rate, which ran at an annual 1.3% in August, a disciplined monetary policy was needed amid serious global inflation risks. Varga said the bank was prepared to
5% next Tuesday after three cuts in a row, taking a pause amid increased global risks and a planned lowering of its inflation goal, a Reuters poll showed on Friday. 5%, and left the door open to further rate easing depending on its September inflation projections and global market developments. 3% in August, a disciplined monetary policy was needed amid serious global inflation risks. Varga said the bank was prepared to gradually lower its 3% inflation target as part of Hungary's euro adoption efforts.
"While the actual inflation figures have come as a dovish surprise compared to the June inflation report, geopolitical factors have derailed any plans for easing," Peter Virovacz, an economist at ING Bank in Budapest, said. " In the poll, 14 of 15 analysts surveyed between September 14-17 projected no change in the base rate next week. One economist projected a 25 bps cut. 25% by the end of the year, 25 bps higher than expected a month ago.
The fall in inflation has been helped by gains in the forint currency on Prime Minister Peter Magyar's pro-European Union turn since taking power in May. Magyar's government has placed adopting the euro back on the agenda which has fuelled a rally in Hungarian assets, but some of those gains have been eroded due to global risks amid rising oil prices due to the conflict in the Middle East. com)