No policy change, no surprise at today's Monetary Council

HUNGARY - In Brief 27 Apr 2021 by Istvan Racz
The regular monthly rate-setting meeting of the Monetary Council was held today, and it came out exactly as expected, with no policy change and no notable novelty brought up by the communiqué. So if analysts (like us) fail to generate any meaningful story around this event, it may not be their fault this time, and we cannot even claim that doing particularly nothing on this occasion was the wrong thing to do.Anyway, the Council carried out a review of the program to buy government bonds today, and it concluded that the program was successful, well structured and a line of action to continue. The next time they are expecting to make a review will be when the MNB has bought HUF3000bn of government bonds in total, i.e. about HUF1000bn higher than the level at which they are currently standing. However, they stressed that this number is not to be meant as a quota, ceiling or target, it will be just another stop to make a technical review. So, this program will presumably stay with us for quite a long while, but that is no surprise either.For us, the most interesting statement is the combination of the Council's assessment on the Eurozone economy, which shrank in Q1 and is likely to recover more slowly than previously expected, according to the MNB communiqué, but that apparently has not lessened the Council's optimism on Hungarian GDP growth, which they still expect at 4-6% this year!

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