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National Bank of Hungary likely to stay on hold, following improvement in inflation figures

The National Bank of Hungary is expected to remain on hold, following considerable improvement in inflation numbers

The central bank can be satisfied that money market interest rates remain low on the one hand, and inflation is starting to rise at last on the other (year-on-year inflation jumped to 1 percent in October).

It is to be noted that roughly HUF500 billion will be forced out from the NBH till the end of the year, thanks to the introduction of the maximum cap on the 3-month deposit. So, the NBH has been successfully working on lower Bubor interest rates and indirectly on a weaker forint.

However, the NBH is only expected to reach its exact inflation target by mid of 2018, but a silver lining may prove otherwise.

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