The MNB does not want to reach the “ideally lowest” rate, but a rate that is sustainable until the middle of 2018, Nagy said.
The MNBʼs policy makers decided to lower the central bankʼs key rate for the second month in a row at a meeting on Tuesday.
Nagy said it remained a question whether or not there would be a third or a fourth cut at policy meetings in May and June.
Measures by the government, rather than the central bank, will support economic growth in future, with fiscal policy taking on the role of incentive provider, Nagy said. If fiscal policy is loose, monetary policy does not have to be so loose, he added.
The MNB will introduce mandatory market making for the Budapest Interbank Offered Rate (BUBOR) for one- and three-month terms from May 2 with the goal of establishing it as a genuine benchmark rate, Nagy said. At present, the BUBOR tracks the base rate and fails to fulfill its function as there is no turnover, he explained. Mandatory dealing on the BUBOR market could be introduced if turnover does not pick up by September, he added.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
