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MNB Dep Governor Flags Cut to O/N Collateralized Loan Rate

MNB

Photo by Adriana Iacob/Shutterstock.com

National Bank of Hungary (MNB) deputy governor Barnabás Virág said the central bank's Monetary Council could decide to reduce the overnight collateralized loan rate at a monthly policy meeting on April 25, in an interview with business daily Világgazdaság.

The O/N collateralized loan rate, which marks the top of the MNB's "interest rate corridor," stands at 25% at present. The O/N deposit rate, at the bottom of the corridor, is 12.5%.

The base rate is 13%, but the MNB pays 18% on O/N deposits it offers at daily quick tenders.

Virág said that MNB policymakers had established an "extremely wide" rate corridor, in addition to raising the rate of the O/N deposits offered at daily quick tenders, in October.

While those decisions were taken in response to "extraordinary conditions," international investor sentiment has "improved much" since then, he added.

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