Sources say Hungary's central bank is likely to hold its policy rate at 5.5% at
its Sept. 22 meeting after three consecutive monthly 25bp cuts, effectively
pausing further easing. The pause will coincide with publication of new
inflation forecasts; sources say the bank plans to lower its inflation target
from 3% to 2.5%, bringing it closer to the ECB's 2% goal. The final decision may
still change depending on market conditions. The government led by the prime
The minister has indicated intent to pursue joining the euro area.
