Here is the decision of the Hungarian Central Bank: the forint is soaring

Rate-setters at the Hungarian Central Bank decided to keep the base rate on hold at 13 percent at a regular policy meeting on Tuesday, the first such meeting this year.

The central bank did not change either end of the interest rate corridor, according to a statement posted on the MNB’s website. Before the decision, the market had expected no change in the base rate at 13 percent and no change at either end of the interest rate corridor.

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The Hungarian Central Bank, led by György Matolcsy, last raised the base rate on 27 September, napi.hu reports. Then, it tightened the interest rate by 125 basis points, following a 100 basis point increase in August. Following the ninth monthly meeting, the end of the base rate hike cycle was announced.

At the same time, monetary tightening continued in October by other means. The MNB made an extraordinary announcement to raise the interest rate on regular central bank tenders to 18 percent. The interest rate on daily instead of weekly deposit tenders is now considered by the market as benchmark.

The decision sent the forint soaring

Although the MNB did not change the interest rate, the bank sent the forint to a seven-month high. The euro is trading around HUF 390 after news commenting on the Bank of Hungary’s decision. The dollar is now below HUF 360, napi.hu reports. The Hungarian currency strengthened against the euro to 390.6 on the news: this is the highest level since June 2022.

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Source: MTI, napi.hu