MNB continues easing, cutting base rate to 1.5%

Analysis

Though some analysts previously expected the Monetary Council of the National Bank of Hungary (MNB), to stop its easing cycle following the emerging economic tensions in Greece, rate-setters decided to cut the base rate by a further 15 bp, to 1.5% today.



It is the fourth base rate cut since the MNB started its easing cycle on March 24 and at its previous policy meeting in May, it maintained their guidance for continued "cautious easing".



"The overwhelming majority of decision-makers judged it necessary to maintain the previous forward guidance and agreed that cautious easing of monetary conditions might continue as long as it supports the achievement of the medium-term inflation target," according to the minutes of the meeting.


The central bank, in March, said it expects 3.2% GDP growth and an inflation of around 0% for this year, while next year it foresees GDP growth of 2.5% and inflation of 2.6%.

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