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Ratesetters Cut Base Rate to 7%

MNB

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The Monetary Council of the National Bank of Hungary (MNB) decided to cut the central bank base rate by 25 basis points to 7% at a monthly policy meeting on Tuesday, according to a release on the MNB's website.

The council also decided to lower the symmetric interest rate corridor in tandem, bringing the overnight deposit rate to 6% and the O/N collateralized loan rate to 8%. At the previous policy meeting in May, the council had cut the base rate by 50 basis points. 

In a statement released after the meeting, the council acknowledged that the inflation outlook had improved in the past quarter, pointing to the MNB's fresh forecast for 2024 average annual inflation of between 3% and 4.5%, down from 3.5-5% in the previous forecast in March. 

"In addition, the incipient recovery in Hungarian economic growth, historically high foreign exchange reserves, the persistent improvement in the current account balance and a cautious approach to monetary policy act in the direction of an improvement in the country's risk perception," the council said.

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