MC member Nemenyi warns against monetary over-tightening. The central bank must be very careful to avoid monetary over-tightening, one of the prominent “dovish” members of the Monetary Council Judit Nemenyi said in interview for Reuters . She firmly rejected some interpretations that the Nov 20 “on-hold” decision meant sacrifice of the inflation target because of the Inflation Report ’s projection for 4.1% CPI rise in 2008 (against 3%+/-1pp target). According to Nemenyi, the central bank’s staff overestimated inflation and furthermore noted that monetary policy should take under consideration that inflation would be decelerating in late-2008 and in 2009. The MC member stressed that factors outside the Inflation Report must be also reviewed as “unchanged interest rate level could result in monetary tightening in itself, if the expected interest rate premium on forint assets declines”. Nemenyi also warned against excessive real appreciation due to the combination of high forint rates and too strong HUF , which would lead to further erosion of competitiveness and unnecessary hurt economic growth.