MPC decides unanimously keeps rates on hold

Analysis

Image by Jessica Fejos

The National Bank of Hungaryʼs (MNB) Monetary Policy Council (MPC) voted unanimously to keep the central bankʼs key rate on hold at 1.35% at a policy meeting on October 20, the condensed minutes from the meeting released Wednesday show.

The decision was widely expected, after the rate-setters clearly signaled an end to an easing cycle at a policy meeting in July.

The minutes offered some background to a statement released immediately after the meeting in which the Council said the base rate could remain at its record low level over the entire period affected by monetary policy.

"A consensus was reached that the Monetary Council should signal that it might keep the policy rate unchanged over the entire forecast horizon by further specifying its forward guidance," according to the minutes.

The minutes confirmed that the Council "agreed that, if the assumptions underlying the projection in the September Inflation Report held up, the current level of the base rate and maintaining loose monetary conditions over the entire forecast horizon were consistent with the medium-term achievement of the inflation target and a corresponding degree of support to the economy".

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