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Official: MNB could cut base rate once more

Interview

Jessica Fejos

The National Bank of Hungary (MNB) is likely to cut its main interest rate one more time, but any further rate cuts are “highly unlikely”, MNB deputy-governor Márton Nagy said yesterday, according to Hungarian news agency MTI.

The building of the central bank in Budapest. (Photo: Jessica Fejos)

“One more step is possible”, Nagy said about the additional rate cuts, MTI reported. 

The MNBʼs Monetary Council decided to cut the central bankʼs key rate by 15 bps to a record low 1.05% at its April 26 meeting.

On March 22 the central bank surprised analysts by announcing that it would cut the central bank’s base rate by 15 basis points to 1.2% for the first time since last summer’s easing period.

On April 26 the central bank decided to continue cutting the key rate by 15 bps to 1.05%.

After the first cut in March, analysts said Hungaryʼs policy rate was likely to trough sharply below 1% as the central bank started its new easing cycle earlier than expected and demonstrated an explicitly dovish stance.

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