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Hungary’s central bank left its key interest rates unchanged, ignoring a depreciation in the forint and a surge in core inflation in one of the European Union’s fastest-growing economies.

The central bank, which has pledged to take meaningful decisions only on a quarterly basis, left the overnight deposit rate at -0.05% and the benchmark rate at 0.9% on Tuesday, matching economists’s predictions. It will publish a statement at 3 p.m. in Budapest.

The most dovish central bank in the EU’s eastern wing will probably wait for new economic projections to be published next month before a comprehensive monetary-policy review. While rate setters have identified disinflationary risks to the outlook, mostly due to a slowing world economy, core price pressures have increased, reflecting a tight labor market and soaring consumption.

The central bank “has been ignoring this temporary rise in inflation, assuming that weaker growth in 2020 and low imported inflation from the eurozone will bring inflation back inside the target range by next summer,” UniCredit SpA analyst Dan Bucsa said in an emailed note before the rate announcement.

Loose financing conditions, as well as deteriorating global risk appetite, have contributed to the forint’s decline. It’s been the third-worst among emerging markets over the last month and traded at 335 per euro on Tuesday, near a 336.31 record reached in September. Markets will likely test forint assets if inflation accelerates, UniCredit’s Bucsa said.

To contact the reporter on this story: Marton Eder in Budapest at meder4@bloomberg.net

To contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Zoltan Simon, Andrea Dudik

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