MNB Leaves Base Rate on Hold at 13%

MNB

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The Monetary Council of the National Bank of Hungary (MNB) left the central bank's base rate on hold at 13% at a monthly policy meeting on Tuesday, according to a report by state news wire MTI.

The council also decided on Tuesday to keep the central bank's O/N deposit rate at 12.5% and the O/N collateralized loan rate at 25%.

The O/N deposit rate and the collateralized loan rate mark the bottom and the top, respectively, of the central bank's "interest rate corridor". The base rate is paid on mandatory reserves.

The rate-setters signaled an end to the tightening cycle at their monthly policy meeting in September, but said tight monetary conditions would be maintained with a focus on sterilizing liquidity and improving monetary policy transmission.

On October 14, the policymakers announced a decision to launch O/N deposit tenders on a daily basis. The central bank has since offered the liquidity sterilization instrument at a rate of 18%.

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