MNB leaves 1-week depo rate at 4%

MNB

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The National Bank of Hungary (MNB) left the rate for its one-week deposit facility unchanged at 4% ahead of a tender on Thursday, according to a report by state news wire MTI.

The central bank had raised the rate ahead of each of the previous weekly tenders for seven weeks in a row.

The rate is 160 bp over the 2.4% base rate.

The one-week depo rate moved in tandem with the base rate from June until November, when the MNB's Monetary Council decided the central bank must be allowed to be set it over the base rate to respond to an increase in short-term risks in financial and commodity markets "quickly and flexibly".

After a monthly policy meeting in December, the council said that changes to the central bank's one-week deposit facility "will feed into the [MNB]'s tightening cycle for a sustained period".

The minutes from that meeting showed the base rate will rise to the one-week depo rate in 2022.

"Members [of the Monetary Council] underlined that it was key for the measures affecting the one-week deposit rate to be implemented persistently in the Bank's cycle of base rate hikes. In order to ensure this, the base rate would converge with and reach again the level of the one-week deposit rate in 2022," according to the minutes released on Wednesday.

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