MNB policymakers keep base rate on hold

Initiatives

Jessica Fejos

The Monetary Council of the National Bank of Hungary (MNB) decided once again to keep the central bankʼs key rate on hold at 0.90% at its monthly policy meeting on Tuesday. The Council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in the spring of 2016.

The Council left the O/N central bank deposit rate at -0.15% and the O/N collateralized loan rate at 0.90% on Tuesday, reported state news wire MTI. 

"In the Councilʼs assessment, maintaining the loose monetary conditions for an extended period are necessary to achieve the inflation target in a sustainable manner," the rate-setters reiterated in a statement released after the meeting.  "The Council will closely monitor developments in monetary conditions and will ensure the persistence of loose monetary conditions over a prolonged period by using the extended set of monetary policy instruments," they added.

Commenting on the newest of these policy instruments intended to flatten the yield curve, the Council said the MNB would continue mortgage bond purchases and its monetary interest rate swap (MIRS) facility as programs "continuously and for a prolonged period," calling them "an integral part of the set of monetary policy instruments."

"The Monetary Council focuses on the relative position of domestic long-term yields relative to international yields when evaluating the program," the rate-setters said.

The Council noted that sentiment on international financial markets had, on the whole, deteriorated since the previous policy meeting, but added that investorsʼ perceptions about the Central and Eastern European region "continue to be positive."

Policymakers acknowledged a shift upwards on the short end of the yield curve, as well as a rise in long-term yield spreads amid the increase in yields on global markets. Over a longer horizon, however, spreads relative to the euro area and the region "decreased significantly," they added.

The condensed minutes of the meeting will be published at 2 p.m. on March 14, MTI noted.

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

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.