Istvan Racz
Former Director, Central Bank


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Recent Country Insights

Interest rates unchanged, ending off-market sales of FX to energy importers announced today
HUNGARY · In Brief · 28 Mar 2023

There was no surprise at today's rate-setting Monetary Council meeting: all interest rates, including the 18% sterilisation rate, the 13% base rate and the 12.5-25% interest rate corridor remained unchanged, as expected (see chart below). Yet an important change of policy was announced: the selli...

Still no rate cut is likely at the March 28 Monetary Council meeting
HUNGARY · In Brief · 26 Mar 2023

Predicting the outcome of the March 28 rate-setting meeting, when the MNB's Q1 inflation report is also due to be discussed, appeared quite easy around the middle of this month. By that time, the forint had depreciated to around EURHUF 395, at which level any reduction of the sterilisation rate l...

Foreign policy: one strike right, one strike left
HUNGARY · In Brief · 21 Mar 2023

In recent days, Hungary continued its usual policy outside the mainstream of the EU and NATO, in a way that could be characterised best as uneasy cooperation, an extremely delicate and risky process in our view. For one issue, Fidesz has announced a decision to support Finland's NATO membership, ...

January BOP data slightly disappointing, no rate cut likely on March 28
HUNGARY · In Brief · 17 Mar 2023

Well, January BOP, published today, was not really splendid. If it had been only about the trade account, it would have been great, the annualised single-month deficit ratio falling to 1% of GDP from 2.8% in January 2022, the merchandise deficit doing reasonably well (stable in absolute terms, do...

Webinar replay - Hungary: Macroeconomic maneuvers and fraught foreign policy
HUNGARY · Report · 17 Mar 2023

How will Hungary’s tight monetary and fiscal policies serve it in 2023 amid economic recession? With rapid BOP improvement on markedly decreasing energy import prices paired with weak domestic demand, will there be disinflation? How will Hungary’s continuing outlier status within the EU and NATO ...

Slide presentation - Hungary: Macroeconomic maneuvers and fraught foreign policy
HUNGARY · Report · 16 Mar 2023

Get insight into Hungary's macroeconomic outlook and the foreign policy challenges it's facing with the presentation from our webinar, "Hungary: Macroeconomic maneuvers and fraught foreign policy".

Inflation fell a bit in February, the economy is weakening further - nothing unexpected
HUNGARY · In Brief · 08 Mar 2023

What everyone had been expecting is now there in the actual data: following a sharp upsurge since about April last year, CPI-inflation edged down a bit, to 25.4% yoy in February, from 25.7% yoy in the previous month. Likewise, core inflation fell a little, to 25.2% yoy from 25.4% yoy. Yesss (!), ...

Moody's did not review Hungary's sovereign credit rating last week
HUNGARY · In Brief · 05 Mar 2023

Moody's passed its first pre-announced review date of this year for Hungary's sovereign credit rating on Friday, March 3 without actually doing a review. As a matter of fact, this sounds like good news, as there seemed to be a realistic chance for a negative rating step, in the form of lowering t...

Is PM Orbán cautiously distancing himself from Moscow?
HUNGARY · In Brief · 03 Mar 2023

On March 1, the Russian government issued a decree to ban visa-free travel by Hungarian diplomats to Russian territory, "until Hungary does not stop breaching the provisions of the underlying bilateral agreement". It is not immediately clear in what way Hungary is breaching the agreement in quest...

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