Hungarian cental bank keeps base rate on hold

Hungarian central bank (NBH) rate-setters kept the base rate on hold at 0.60 percent at a regular meeting on Tuesday, and they also left the interest rate corridor unchanged.

In a statement released after the meeting, the council reiterated its earlier policy stance.

“The monetary conditions established at the short end support price stability, the preservation of financial stability and the recovery of economic growth in a sustainable manner,” the policy makers said.

The council also repeated that it is “key” to keep short-term yields at a “safe distance from a range close to zero” as well as its commitment to “maintaining price stability during the coronavirus pandemic”.

The council said it closely monitors “the persistence of inflationary effects” resulting from the economic recovery as well as “possible inflationary effects of financial market developments”.

“If warranted by a change in the outlook for inflation, the [NBH] will be ready to use the appropriate instruments,” the council added.

As we wrote today, The NBH expects the economy to contract between 6.0 percent and 6.5 percent this year, forecasts from its latest quarterly Inflation Report released, details here.

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Source: MTI