Rate-setters stand by position on monetary policy

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The Monetary Council of the National Bank of Hungary (MNB) stood by its position to hold the central bankʼs key rate at 0.90% at a policy meeting on July 26, the condensed minutes of the meeting released late yesterday show, according to news agency MTI.

“If the assumptions underlying the [MNBʼs] projections held, the current level of the base rate and maintaining loose monetary conditions for an extended period were consistent with the medium-term achievement of the inflation target and a corresponding degree of support to the economy,” according to the minutes. 

The statement nearly matches others made by the Council since signalling an end to an easing cycle at a policy meeting in May.

The Council noted that a “watchful approach” to monetary policy is still justified because of uncertainty in the global financial environment, with some members citing the direct and indirect impacts of the U.K. referendum on EU membership and uncertainty related to non-performing loans in the Italian banking sector.

The decision to keep the base rate on hold at the July policy meeting was unanimous, though one internal member, Deputy Governor Márton Nagy, was absent.

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