* Cbank seen cautious with easing, eyeing forint -analysts
* 9 of 15 analysts see new council open to monetary stimulus
* Most analysts do not expect rise in inflation target
By Krisztina Than and Sandor Peto
BUDAPEST, Jan 21 (Reuters) - A revamped Hungarian monetary council with members chosen by a government-controlled committee will be open to using stimulus measures to support an unorthodox pro-growth agenda but is not expected to start cutting interest rates.
Council members backed by the government will be in a majority after the parliament committee appoints four new rate-setters in March under a rule change planned by the Fidesz-led government, which has criticised central bank policy as too restrictive since sweeping to power last spring.
Mindful of the dangers of a much weaker forint, as well as domestic inflation risks and the global market environment, the new-look rate-setting body will not start cutting borrowing costs, a Jan 19-20 Reuters poll of analysts showed on Friday.
But it may risk the market's displeasure by opting for unconventional stimulus moves such as buying corporate bonds in the secondary market or trying to rechannel trillions of forints held in the bank's 2-week bills into the economy.
Nine of 15 analysts surveyed said it was possible the central bank (NBH) would start buying bonds including those of state-owned MFB Bank to boost the economy, a government idea which has to date been rejected by the bank.
While nine of 18 analysts said the NBH would turn generally
more dovish in its policy, the poll showed analysts do not
expect the new Council to act irresponsibly and risk forint
falls, as that would hit the country's many Swiss franc
"I expect a more dovish policy, but not at the expense of a much weaker exchange rate," said David Nemeth at ING.
RATE HIKE NEXT WEEK?
The NBH raised interest rates by 50 basis points in two
steps late last year to 5.75 percent
The centre-right government, which has rejected the path of austerity and instead used a series of unorthodox measures to boost economic growth, has said the rate increases were unjustified.
But a full policy U-turn under the new monetary council is unlikely.
"Raising interest rates will be taken off the agenda, but they will pay attention to the exchange rate," said Gergely Szabo Forian at Pioneer Fund Management.
The median forecast of analysts showed the base rate at 6 percent at the end of June and the same level at the end of both 2011 and 2012, though some said a cut was possible in the second quarter of this year.
"We forecast flat (rates) from February but risks are strongly to the downside," said Peter Attard Montalto at Nomura.
If wide-ranging fiscal reforms promised by the government by next month satisfy investors, reducing risk premiums on Hungarian assets, there could be bigger room for easing, some analysts said.
But if the plans disappoint, markets could punish Hungary, with its debt rating possibly downgraded to "junk" status.
INFLUENCE OVER POLICY?
The legislative change, which the European Central Bank has criticised, will allow a Fidesz-majority parliamentary committee to nominate four rate-setters to replace members whose mandates expire on March 1, potentially increasing government influence over monetary policy.
Economy Minister Gyorgy Matolcsy has not only criticised the bank's rate policy but also called on the bank to be more supportive to the government's pro-growth policies.
He told Kossuth Radio in Sept. 2010 that growth could pick up in 2011 if the central bank "switches on monetary stimulus" and that he expected the bank's policy to change after the composition of the Council changes. [ID:nLDE68G0JE]
A media report in November said the government may also want the bank to raise its 3 percent inflation target.[ID:nLDE6AS18T]
While 13 of 17 analysts said they did not expect the new Council to raise the inflation target, most forecast the bank could launch some kind of monetary stimulus.
"If the government wants a new financing model affecting corporate bonds, that (support from the new Council) may be possible," said Pioneer's Forian, adding that it could be a risky move.
"There are plenty of kinds of monetary stimulus and all of them can have a common impact on investors: they may scare them, causing a forint weakening and a rise in yields."
Some analysts also highlighted the risk that if NBH Governor Andras Simor -- viewed by markets as a safe pair of hands -- and his two vice governors are constantly outvoted, they may resign from the council.
Simor has said repeatedly that he wanted to fulfil his mandate which runs until 2013.
"It's possible (that someone resigns), but I don't think that this is likely. Instead they would express their dissenting opinion and try to persuade the external members to pursue a different policy," said Janos Samu, analyst at Concorde.
"In the case of Simor we have seen a very strong commitment that he will stay."
For detailed analyst comments pls click on [ID:nLDE70J0LK]
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(Writing by Krisztina Than; Editing by John Stonestreet)