Central bank benchmark rate down for 12th consecutive time
The verdict is in on the National Bank of Hungary (MNB) main interest rate, and a record low has been announced with the 12th consecutive reduction to the rate. The benchmark deposit rate was reduced to 4% from 4.25% and MNB President György Matolcsy is slated to announce the bank’s “guidelines” for interest-rate policy this afternoon. Matolcsy may also discuss the current position on the “easing cycle,” this last rate cut suggesting its drawing to a close.
Though the forint is down slightly this morning, the past three months has seen an overall 1.6% gain in the currency’s value; Benoit Anne of Societe Generale was impressed enough this month to note prior to the announcement that “The forint has been extremely well behaved over the last month, suggesting that [MNB will continue lowering rates] as close as possible to 3%, possibly even a little lower…”
Anne’s statement seemed to marked a departure from the analyst’s advice of less than one month ago when he said “The recent out-performance [of the forint] is unlikely to be sustainable and is likely to be reversed.” Some are still keeping their optimism cautious, however.
A Financial Times blog noted earlier today that “although the cuts can’t go one forever, the current account surplus buys Hungary some time to kickstart its economy with low rates.”
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.