Rate-setters Point to Continued Need for 'Disciplined' Policy

MNB

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Members of the Monetary Council of the National Bank of Hungary (MNB) said "disciplined monetary policy" was still necessary to bring inflation down to the central bank target at a monthly policy meeting in November, according to a report by state news wire MTI.

"Members pointed out that disciplined monetary policy was still required in order to achieve price stability in a sustainable manner," the minutes from the meeting released on Wednesday show.

Council members voted unanimously to cut the base rate by 75 bp to 11.5%, after weighing a 50 bp and a 100 bp reduction, at the meeting on November 21.

"Monetary Council members were unanimous in their view that strong disinflation and the stability of financial markets allowed a further reduction in the base rate; however, a cautious approach should be maintained due to existing external financial market and geopolitical risks," the minutes said, echoing the Council's statement immediately following the policy meeting.

The minutes noted that the council took its decisions "step-by-step, carefully and in a data-driven manner, paying particular attention to incoming data, factors influencing the inflation path and developments in the risk environment".

The rate-setters acknowledged that the base rate was over the level of inflation in October and said positive real interest rates "supported a further decline in inflation".

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