Budapest, May 26 (MTI) – The National Bank of Hungary (NBH) has concluded its easing cycle, central bank deputy governor Márton Nagy said on Thursday.

The bank has no need to either cut or raise rates right now, Nagy told journalists.

As we wrote, the NBH’s Monetary Council decided to lower the central bank’s key rate by 15 basis points to 0.90 percent at a monthly policy meeting on Tuesday. The decision was in line with market expectations.

Nagy said the key rate is “at an appropriate level right now”, there is no need for further rate cuts and the key rate should remain unchanged “for as long as possible”.

The central bank will only move if action is needed to meet the CPI goal, but the June Inflation Report will not contain data to change the current stance, the deputy governor added.

The central bank expects GDP growth to be around 3 percent this year and therefore will not adjust its 2016 GDP growth prediction by much in June, Nagy said. The bank expects GDP growth to accelerate in the second half of the year because of lending to small firms, home constructions and allocations of EU funding.

Concerning events abroad, Nagy mentioned moves by the Federal Reserve in the United States and Brexit as possible risks to economic growth.

At present there is no need for any additional monetary steps. If the need should arise for loosening, the NBH would use unconventional tools, Nagy said, adding that the self-financing programme may be fine-tuned if further easing is needed.

As regards the BUBOR market, Nagy said the bank was satisfied with its performance in May. A review of the BUBOR market in September is still on the table as it is in a state of development at the moment and the BUBOR could also be part of the possible fine-tuning measures, he said.

Nagy reiterated that the central bank has no exchange target for the forint and said that it prefers a stable forint.


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