The most important objective of economic policy as a whole is to ensure stable economic growth that is sustainable over the long term. To this end, the central bank keeps inflation at a low level through pursuing a predictable and credible monetary policy. This also underlies the Central Bank Act, which stipulates that ‘the primary objective of the MNB shall be to achieve and maintain price stability’, in line with EU regulations and international practice gaining ground to a growing extent.
The MNB implements inflation targeting system since the summer of 2001 in line with its primary objective to achieve and maintain price stability, which is also defined by the law. Inflation targeting is a monetary policy strategy where the central bank – using its tools – seeks to achieve the publicly announced inflation target. The transparency and the accountability of monetary policy followed by the central bank is an important element of the inflation targeting system.
The aim of the Inflation Report is to promote public understanding of the Magyar Nemzeti Bank’s monetary policy by presenting past and expected developments in inflation and providing detailed assessments of the key macroeconomic factors driving inflation.
Monetary policy instruments are at the disposal of MNB to conduct monetary policy. The main goal of the MNB in forming and operating its monetary policy instruments is that the short term money market rates adjust to its key policy rate and to expectations, and the operational framework promotes the efficient implementation of interest rate policy. However, since the onset of the financial crisis numerous central banks have implemented non-standard monetary policy measures.