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.
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