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MNB raises 1-week deposit rate 30 bp to 6.15%

MNB

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The National Bank of Hungary (MNB) raised the rate for its one-week deposit facility by 30 bp to 6.15% ahead of a tender on Thursday, according to a report by state news wire MTI.

The increase followed a decision on Tuesday by policymakers to raise the central bank's base rate by 100 bp to 4.4%.

After the monthly policy meeting, the MNB's Monetary Council said the base rate will "gradually catch up" to the level of the central bank's one-week deposit facility "in the coming months", adding that MNB "continues to stand ready to respond quickly and flexibly by setting the interest rate on the one-week deposit instrument if warranted by short-term risks in financial and commodity markets".

At a press conference after the meeting, MNB deputy-governor Barnabás Virág said the timing for the convergence of the base rate and the one-week deposit rate would be "determined by the development of outlooks and risks".

Between the Monetary Council's monthly policy meeting in February, which took place days before the outbreak of the war in Ukraine, and the March meeting, the one-week deposit rate was raised by a combined 155 bp.

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