Hungary’s central bank keeps base rate on hold at 0.9%

EU

Jessica Fejos

The Monetary Council of the National Bank of Hungary (MNB) kept the central bank’s key rate intact at 0.9%, just as expected, at its rate-setting meeting today, according to reports. Since the council signaled the end of an easing cycle in May, the policy rate has been kept on hold.

At the same time, rate-setters have recently made use of "unconventional, targeted" instruments to ease monetary policy further, such as placing a limit on three-month deposits, the central bankʼs main instrument for sterilizing liquidity, as well as modifying the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates, Hungarian wire service MTI noted.

At the meeting on Tuesday, the council left the interest rate corridor unchanged, with the O/N collateralized loan rate at 0.90% and the O/N central bank deposit rate at -0.05%, MTI added.

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