MNB keeps base rate on hold at 0.9%, as expected

MNB

The National Bank of Hungary’s (MNB) Monetary Council (MC) left the central bank’s base rate on hold at 0.9% at a policy meeting today, the decision being in line with expectations, Hungarian news agency MTI reported.

The Council did not modify the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates.

The O/N collateralized loan rate, the top of the range, remained unchanged at 0.9%, and the O/N central bank deposit rate, the bottom of the range, was also unchanged at -0.05%. The interest rate for the one-week collateralized loan also remained at 0.9%.

The council signaled an end to its easing cycle at a policy meeting in May and has since stood by its position on keeping the base rate on hold. At the same time, the council has taken a number of unconventional monetary policy moves, such as limiting the amount and frequency of the MNBʼs three-month deposits, the central bankʼs main sterilization instrument, as well as cutting banksʼ reserve requirement ratio and modifying the interest rate corridor.

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