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MNB raises 1-week depo rate by 30 bp to 3.6%

MNB

Image by Jessica Fejos

The National Bank of Hungary (MNB) announced a rate of 3.6% for its one-week deposit facility ahead of a tender on Thursday, 120 bp over the base rate, according to a report by state news wire MTI.

The central bank raised the one-week depo rate by 30 bp from the tender a week earlier.

At a monthly policy meeting on Tuesday, MNB's Monetary Council said changes to the central bank's one-week deposit facility "will feed into the [MNB]'s tightening cycle for a sustained period". The council said the MNB is ready to set the one-week depo rate "persistently above the base rate", adding that raising the one-week depo rate "at least by as much as the base rate is raised" is warranted.

The policymakers raised the base rate by 30 bp to 2.4% at the meeting on Tuesday.

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

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