MNB decision-makers reaffirm unchanged base rate



Decision-makers at the National Bank of Hungary (MNB) reiterated the central bankʼs stand on using unconventional tools to achieve monetary policy goals, rather than changing the base rate, in a review of those tools published today.

“Limiting the allotment of three-month deposits has become an integral part of the central bankʼs toolkit, thus the MNB can support the achievement of central bank goals with unconventional measures in future while keeping the base rate unchanged,” Deputy Governor Márton Nagy and Managing Director Barnabás Virág said in the review, echoing statements made by rate-setters since summer. 

“The conditions for the MNBʼs loose monetary policy could remain in place until at least the end of 2017, but even until 2018-19,” they added.

Nagy and Virág outlined the impact of the central bankʼs unconventional measures on lower costs for borrowers and warned that a further reduction in the base rate could put the MNB in an environment where “the basic laws of economics and monetary policy may behave differently, presenting unintended adverse reactions.”

MNB Governor György Matolcsy said in an interview published earlier in November that the central bank could keep its base rate unchanged at 0.90% even if other central banks start a tightening cycle.

“We furnished and set a base rate that is functional for the long term, which can be maintained even if the Fed follows a gradual tightening cycle and the ECB or the Japanese central bank possibly respond,” Matolcsy told business daily Világgazdaság, as recalled by Hungarian news agency MTI. “Even in this case, we believe that the conditions for the MNBʼs loose monetary policy can remain in place until the end of 2017, or even, I believe, until 2018-2019,” the governor added.


European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Chain Bridge to be closed for traffic for 18 months City

Chain Bridge to be closed for traffic for 18 months


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
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.