MNB raises 1-week depo rate by 30 bp to 4.6%

MNB

Image by Jessica Fejos

The National Bank of Hungary (MNB) raised the rate for its one-week deposit facility by 30 bp to 4.6% ahead of a tender on Thursday, according to a report by state news wire MTI.

MNB policymakers had signaled in January that the central bank aims to change the one-week deposit rate once a month but stands ready to use the instrument "flexibly" and could modify it more frequently, if necessary.

The rate was raised by 30 bp days after the Monetary Council's monthly policy meeting in January and stayed at 4.3% for four weeks in a row.

After the council's February policy meeting, on Tuesday, MNB deputy-governor Barnabás Virág said the scale of the one-week deposit rate rise in January would be "a guideline" for the increase in February.

The one-week deposit rate now stands 120 bp over the 3.4% base rate.  

The one-week depo rate moved in tandem with the base rate from June until November, when the Monetary Council decided the central bank must be allowed to be set it 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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