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Fed’s interest rate cuts benefits MNB

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The Fed’s interest rate cuts may also be good for the real economy in Hungary, writes mfor.hu.

Image: Wikimedia Commons

This week, the Federal Reserve cut its base rate target range by 50 basis points, dropping to 1-1.25%.

The move was explained by the spread of the coronavirus and its damaging market effects by Fed Chairman Jerome Powell, who justified the extraordinary decision by maintaining strong U.S. economic growth.

Following the decision, an initially optimistic mood prevailed in the markets and the forint also benefited.

The Fed’s move has not only affected the forint, but may have eased the pressure on the National Bank of Hungary (MNB), mfor.hu adds.

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