“If the assumptions underlying the [MNBʼs] projections held, maintaining the current level of the base rate and loose monetary conditions achieved through the change in monetary policy instruments for an extended period was consistent with the medium-term achievement of the inflation target and a corresponding degree of support to the economy,” read the minutes.
“If inflation remained persistently below the target, the Council would stand ready to ease monetary conditions further using unconventional, targeted instruments,” it added.
The Council earlier placed limits on the central bankʼs main instrument for sterilizing liquidity and introduced FX swaps as part of its “unconventional” monetary policy toolbox. The Council noted that a “watchful approach” to monetary policy is still justified because of uncertainty in the global financial environment.
The decision to keep the base rate on hold at the policy meeting on July 18 was unanimous. MNB Governor György Matolcsy was not present at the meeting.
The Councilʼs next policy meeting will take place on August 22.
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