Hungary holds base rate at 0.9% with inflation as ‘single anchor’

By Susanna Moon

Chicago, July 24 – The Monetary Council of Hungary’s Magyar Nemzeti Bank decided to keep the central bank base rate at 0.9% at its meeting on Tuesday.

The country’s economic output is close to its potential, with the economy picking up further in 2018 and then gradually easing the following year, according to a bank statement.

Meanwhile, the bank expects to meet the inflation target “in a sustainable manner from mid-2019, as the temporary, inflation boosting effects of oil price changes fade.”

The bank said its “single anchor is inflation.”

Inflation was 3.1% in June and core inflation was 2.4%, with the increase due to rising fuel prices.

To attain the inflation target, maintaining the base rate and the loose monetary conditions is still needed, the bank said.

“The current volatile international environment suggests a more cautious approach,” the bank added.

The council also decided to maintain the overnight collateralized lending rate and one-week collateralized lending rate at 0.9% and the overnight deposit rate at negative 0.15%.

© 2015 Prospect News.
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