MNB raises 1-week depo rate by 20 bp to 3.1%

MNB

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The National Bank of Hungary (MNB) announced a rate of 3.1% for its one-week deposit facility ahead of a tender on Thursday, 100 bp over the base rate, according to a report by state news wire MTI.

The central bank raised the one-week depo rate by 20 bp from the tender a week earlier.

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 in November that the 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".

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

At a non-rate-setting meeting on Tuesday, MNB's Monetary Council decided to widen the interest rate corridor by raising its O/N deposit rate by 45 bp to 1.6% and the O/N and one-week collateralized loan rates by 105 bp to 4.1%

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