Today's Monetary Council: once again no action, no surprise

HUNGARY - In Brief 29 Jan 2019 by Istvan Racz

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The Monetary Council indeed did nothing today, just as analysts expected. They even missed the opportunity to raise their eyebrows a little bit higher, through injecting a pinch of additional hawkishness into the language of the communiqué. Indeed, the statement they put out after the meeting seems to have made a tiny step in the dovish direction. They put some additional stress on the downside risk factors regarding the international inflation environment.At first glance, it may seem to observers as if the had gone a bit too far in Mr. Nagy's statement of January 16, possibly by intention of course, and now they have started to pave the escape route, just in case they need a reason for not tightening eventually.The key point, in our view, remains that the MNB is not at all that determined to tighten unless when it is required with absolute certainty. And even then, they will likely grab all sorts of tactical chances to delay tightening and/or keep it as little as possible.