MNB Raising Lenders' Reserve Ratio

MNB

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At a press conference after the monthly policy meeting of the Monetary Council, National Bank of Hungary (MNB) deputy governor Barnabás Virág said the council had decided to raise lenders' mandatory reserve ratio from 5% to 10% from April 1.

The MNB would consult the European Central Bank on the measure in the coming days, he added. Virág augured an improvement in Hungary's current-account balance as a decline in European gas prices shows up with a delay, domestic demand falls, and new industrial capacities support exports.

He added that one-offs impacted the current account balance in November, pointing to the effect of imports necessary for significant domestic investments or stock building.

Hungary's C/A deficit reached EUR 1.699 billion in November, widening from EUR 1.556 bln in October.

Virág said inflation could continue to rise in January as the elimination of a motor fuels price cap early in December continues to impact the headline figure, but he added that disinflationary effects would strengthen in the coming months.

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