MNB offers 1-week depo at 2.5%, 40 bp over base rate

MNB

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The National Bank of Hungary (MNB) offered its one-week deposit facility at a rate of 2.5% at a tender on Thursday, 40 bp over the base rate, according to a report by state news wire MTI.

The one-week depo rate has moved in tandem with the base rate since late June, but the central bank's Monetary Council said at a monthly policy meeting on Tuesday that MNB "must be ready to set the interest rate on the one-week deposit above the base rate", allowing it to respond to a recent increase in short-term risks in financial and commodity markets "quickly and flexibly".

MNB deputy-governor Barnabás Virág signaled at a press conference after the meeting that the one-week depo rate would rise over the base at the next tender for the facility on Thursday.

Policymakers raised the base rate by 30 bp to 2.1% at the meeting on Tuesday, after CPI spiked at 6.5% in October.

MNB accepted all HUF 7.704 tln of bids at the tender for the one-week depo on Thursday.

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