Today it seems increasingly likely that oil and raw materials will remain more expensive than they were a couple of years, or even months ago. What remains to be seen is whether we are only facing a relative price change or whether this tendency is a harbinger of broader global inflationary pressure affecting the widest range of goods and services.
What can be achieved through monetary policy in a small, open economy in order to meet these challenges? As I mentioned previously, the task of monetary policy-makers is to set an interest rate path which ensures that the inflation target is achieved with the least possible economic sacrifices. Global financial turbulence has so far caused only limited increase in risk premia in Hungary.