MNB to continue easing cycle if market sentiment improves, minutes show

The National Bank of Hungary's (MNB) Monetary Policy Council said members could consider a further reduction in rates if improved financial market sentiment persists and the inflation target is in line with the central bank's mid-term target, according to the condensed minutes, published on Wednesday, of a rate-setting meeting on January 29. “In terms of the Council’s future interest rate decisions, members agreed that the Council would only consider a further reduction in the policy rate if the medium-term outlook for inflation remained consistent with the bank’s 3% target and the improvement in financial market sentiment was sustained,” according to the minutes. The Council decided at the January meeting to cut the central bank's base rate by another 25 basis points to 5.50%, continuing an easing cycle started in August. The decision was in line with market expectations. The Council will hold its next rate-setting meeting on February 26.