Nagy: MNB will cut base rate, adjust overnight rates this year
National Bank of Hungary (MNB) is likely to cut its base lending rate below the current 1.35% this year and adjust overnight rates in order to help fuel inflation, MNB Deputy Governor Márton Nagy said during a press conference held yesterday in Budapest, online portal marketwatch.com reported today.
MNB Deputy Governor Márton Nagy speaks at a press conference in Budapest yesterday. (Photo: MTI/Tamás Kovács)
Plans are in place to adjust overnight rates well before the rate cut expected for later this year, the portal cited Nagy who added: “The central bank is ready to use any tool to reach the inflation target; cutting the key rate this year is very likely.”
Exceedingly low inflation expectations in Hungary and the forint’s performance on currency markets is hampering the MNB’s efforts in meeting its 3% inflation target, Nagy said, according to marketwatch.com.
Nagy added that he anticipates liquidity and the central bankʼs balance sheet will drop by approximately €3 billion this month, the portal reported.
The deputy governor’s comments confirm a major shift in the MNBʼs current stance on monetary policy at a time when European central banks are eagerly seeking ways to reign in inflation towards official targets, marketwatch.com reported.
The central bank’s next rate setting meeting is schedule for March 22.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
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.