London analysts liken MNB policy instrument decision to monetary easing
National Bank of Hungary (MNB) policy makersʼ decision on Tuesday to replace the central bankʼs main policy tool, a two-week deposit, with a three-month deposit could, in theory, stimulate lending, but its main effect is likely to lower the cost of sovereign borrowing, emerging market analysts at the Royal Bank of Scotlandʼs London investment unit said in a note.
The RBS analysts called the decision a "quasi-rate cut or a quasi-QE program", though without central bank participation.
The net result of the step is expected to be looser monetary policy conditions, they said.
The decision reaffirms the MNBʼs dovish commitment three weeks ahead of rate-settersʼ next policy meeting, the analysts said.
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