Hungary’s central bank said downside risks to the long-term inflation outlook have strengthened before a scheduled comprehensive policy review next month, a signal that policy makers may be ready to forgo further tightening and may consider the need for easing.
The monetary authority looked past the weakest forint in a year to keep borrowing costs near zero on Tuesday, as rate-setters awaited action from the euro area before their September meeting, when Hungary’s central bank will publish updated inflation forecasts.