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MNB: No hasty rise in interest rates

MNB

The National Bank of Hungary (MNB) wishes to reduce Hungary’s international debt-exposure and will avoid raising interest rates in the light of recent market upheaval, Deputy Governor Adam Balog said yesterday.

Past policies of “raising interest rates right away (…) are unfortunate. We do not want to become a panicky central bank with hasty moves, one which does not prepare well ahead”, the MNB deputy governor noted.

Inflation outlook supports the bank decision to maintain record-low interest rates until the end of 2015, Balog said. However, there is “no room now to go lower”, he added. “We would like the market to accept that we do believe in inflation targeting”, the Deputy Governor stated.

The MNB conducted 24-consecutive rate cuts over a two-year period until the end of August, lowering the base to 2.1% from 7% over that period. 

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