3.60%: National Bank of Hungary cuts base rate again

Analysis

It’s official: The National Bank of Hungary (MNB) announced at about 2pm CET that its base rate will once again be lowered by 20 base points to the new record-level mark of 3.60%. This marks the third consecutive month of a 0.20% drop and the 14th in a row which has seen the Monetary Council reduce the rate.

This was the expectation of a majority of analysts, experts and pundits, with most polled by Reuters and the Wall Street Journal, among others, reckoning today’s cut would be 0.20%

In a statement released after the decisive meeting, the Monetary Council stated that the MNB’s “3% mid-term inflation target provided the scope for further monetary policy easing.

“In the Council’s view, considering the outlook for inflation and the real economy and taking into account perceptions of the risks associated with the economy, further cautious easing of monetary conditions may follow,” read the statement in part.

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