January 15, 2020 / 11:50 AM / 6 days ago

UPDATE 1-Hungary's inflation within expectations, central bank's Nagy says

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VIENNA, Jan 15 (Reuters) - Hungary’s rise in headline inflation to a seven-year high is in line with the central bank’s forecast that it will peak this quarter, its bank’s deputy governor said on Wednesday.

Annual headline inflation in Hungary rose to 4% in December, data published on Tuesday showed. However, tax-adjusted core inflation, which the central bank watches closely, eased slightly to 3.5%.

“This is fully in line with expectations, not just in the market but in line with the MNB (central bank) forecast, and this is valid for the headline and for the core inflation,” Marton Nagy told reporters on the sidelines of a Euromoney conference.

“So there is nothing. No reaction on it,” Nagy said, adding that the central bank has no target for the forint’s exchange rate, but the recent depreciation was of no concern in the medium term.

“If you see the forecast in the (central bank’s) inflation report, this means that what we indicated (is happening) in that in the first quarter inflation reached a peak somewhere here but in the next quarter, from the next quarter, it will decrease back and from the next year, so 2021, in the beginning, reach the target of 3%,” he said.

The Hungarian central bank left interest rates unchanged in December and maintained its loose policy stance.

Reporting by Francois Murphy; editing by Larry King

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