June 14, 2018 / 8:46 AM / 2 months ago

UPDATE 2-Hungarian cbanker says no need to change easing bias for now

* CPI could temporarily exceed 3 pct

* Still expects to reach target in 2019

* Bank monitors oil prices, exchange rates, ECB

* Next policy meeting due on Tuesday (Adds comment on inflation outlook)

By Gergely Szakacs and Marton Dunai

BUDAPEST, June 14 (Reuters) - Hungarian central bank ratesetter Gyula Pleschinger said on Thursday he saw no reason for now for the bank to change its easing bias, and that it still expected inflation to climb to its 3 percent target next year.

Hungarian bond yields have risen in recent weeks while the forint plumbed near two-year-lows, on rises in U.S. Treasury yields and prospects of the European Central Bank ending its monetary stimulus programme.

“Obviously we monitor oil prices, exchange rate developments and global events,” Pleschinger told Reuters on the sidelines of a central bank conference. “The European Central Bank represents a yardstick - what they do, what they think, what they expect. We will act accordingly, if needed.”

The ECB holds a policy meeting on Thursday at which it will debate whether to end its huge asset purchase scheme by year-end.

The National Bank of Hungary (NBH), one of Europe’s most dovish central banks, meets on Tuesday, when it will also present its quarterly inflation report.

“For now I see no reason to deviate from our easing bias,” said Pleschinger, one of nine NBH ratesetters. “There may be market moves which temporarily boost inflation, but it can remain within the tolerance range.”

The central bank’s tolerance range is plus/minus 1 percentage point around the 3 percent medium-term target, which Pleschinger said he expected to be reached in the second quarter of 2019.

Having held around 2 percent for the better part of the past year, Hungarian annual headline inflation rose to 2.8 percent in May. Core inflation, which excludes fuel, was unchanged at 2.4 percent, data showed last week.

At 0848 GMT, the forint traded at 321.45 versus the euro, down from 320.6 before Pleschinger’s comments. The currency has lagged its regional peers this year.

Reporting by Gergely Szakacs and Marton Dunai Editing by John Stonestreet

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