Hungaryʼs central bank holds key rate at 0.9%
In line with the market consensus, rate setters on the Monetary Council of the National Bank of Hungary (MNB) decided to leave the central bank’s base rate on hold at 0.9% at a policy meeting today, according to reports. The decision was widely expected.
The Council also lowered the top of the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates, by 10 bps, Hungarian news agency MTI reported. The O/N collateralized loan rate, the top of the range, stands at 1.05%, while the O/N central bank deposit rate is -0.05%.
"The [MNB] aims to ease monetary conditions and provide a corresponding degree of support to the economy through a decline in money market rates. The Monetary Council is making every effort to ensure that the limit imposed on the stock of three-month deposits exerts its expected easing effect efficiently," the news agency cited the central bankʼs statement.
The Council signaled an end to an easing cycle at a policy meeting in May and has since stood by its position on keeping the base rate on hold, while leaving room for the possibility of using unconventional tools of monetary policy.
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