Hungarian central bank raises base rate to 18-year high – UPDATE
Hungarian rate-setters raised the central bank’s base rate by 100 basis points, to 11.75 percent, at a regular policy meeting on Tuesday.
Currently, the base rate is higher than it was during the 2008 financial crisis, when it peaked at 11.5 percent after an extraordinary rate hike between 22 October and 25 November 2008.
The last time the base rate was at a level similar to the current one was in May 2004 (when the 12.5% level reached at the turn of 2003-2004 was gradually reduced).
The Monetary Council also decided on Tuesday to raise the O/N deposit rate by 100 basis points to 11.25 percent and the O/N and one-week collateralised loan rates by 100 basis points to 14.25 percent.
The O/N deposit rate and the collateralised loan rate mark the bottom and the top, respectively, of the central bank’s “interest rate corridor”.
The decision was in line with expectations.
“The further rise in inflation and persistent inflation risks warrant the decisive continuation of the tightening cycle,” the Council reiterated in a statement released after the meeting.
“Maintaining tighter monetary conditions for a longer period is warranted to manage increasing second-round inflation risks resulting from persistently negative supply effects,” they added.
The Council reiterated that the tightening cycle will continue “until the outlook for inflation stabilises around the central bank target in a sustainable manner and inflation risks become evenly balanced on the horizon of monetary policy”.
Olli Rehn, a member of the Governing Council of the European Central Bank (ECB), believes that the ECB has to implement new measures to stop the record-high inflation in the European Union. Furthermore, the weak euro against the American dollar worsens the energy crisis. Drastic measures seem to be inevitable. However, such decisions might mean the further weakening of the Hungarian forint, details HERE.
Read alsoDie Presse: without EU funds, Hungary will face much worse recession
3 Comments
With the rise in interbank % interest, it’s high time all commercial banks, large & small, start depositing a fair interest % to saving accounts Nation wide.The public keeps trillions of Forints in saving accountbut bank top Mgt. Ign
ored it too long!!! Time to make 180* turn and do something positive for your customers!
We realize these are the last 10 years of banking industry existence, soon every financial move will be on line with no 3rd. Party intervention.
Here is the challenge for Banks Top Mgt. to show a little humanity, not only greetings.
Last sentence should read: show Humanity, not only greed.
Simon – what we are FACING in Hungary at this point of time, from this Dictatorial styled, its agenda muchly Focused on POWER – a Philosophy, that is “driven” by – “Whats in this for us” – and then the citizens get the “left”overs.
Hungary – when you have a Government that “veils” it-self in being a Democracy, but in FACT is of a Dictatorial regime, without Citizens objection, and Opposition Political Partys – that function in disorder, and NEVER show a sign of SOLIDARITY – to oppose & fight, this present Government, the on-going down-ward TREND in Hungary – peoples basic life quality will continue to decline.
The Hungarian Government – its CONTROL over peoples FREEDOMS – media,television,judiciary – and vastness of “other” sectors of society, then Banking – Owners and Board Members – high profiled SUPPORTERS of the Fidesz Party – the PHILOSOPHY of this present Dictatorial Government – stems from its POWER.
Hungary – at this point in time – all the componentry used by internationally respected organizations who do anaylsis on the Econmic & Financial picture of a country – indicate that Hungary is a country – in a strong down-ward TREND that STRONGLY indicates, an Economy, is a cataclysmic mess.
Hungary – just not interest rates or inflation, the “broader” picture, the “imploding” property market, the de-valuation of the forint, the “relationship” with the European Union – and numerous or countless “others” – that see or “bear witness” to FACT, that the Economic & Financial picture – outlook into the FUTURE for Hungary – is DARK.
Read the article and commentators comments titled – “The 5 most Disguisting Hungarian Dishes – according to Foreigners ” dated 29/08/2022 – in Daily News Hungary.
Hungarians in our MILLIONS should be DISGUISTED at what commentators write which is FACT – and the case in the MAJORITY of Public Hospitals throughout Hungary.
Hungarians voted for the return to office of this present Government – led by Victor Orban.
Hungary have had “excessive” time to KNOW – what the ideas and political philosophy and direction – led by Victor Orban – he WANTS Hungary to “drive” to-wards – at all costs.
Social Equality & Social Inequality – are these (2) two Major HUMAN Social issues – that are RAMPANT in increasing numbers in Hungary – are they UNDERSTOOD – the ramifications impact they HAVE – on Citizens Society Life ???
“The rich get Richer & the poor get poorer” – in Hungary – taking ADVANTAGE – driven by GREED & EXPLOTATION – of “others” – in Hungarian Society, from “lower” – Stations in Life.
The present Government, we witness – using or FABRICATING blame, for the state of the “crumbling” economy – on the Russian War on the Ukraine and the SANCTIONS – imposed by the European Union – in great part, is just Fidesz Party – PROPAGANDA.
Hungary – you voted for this Government – what FRIENDS in Europe besides Russia inclusive of China – what FRIENDS do we have – as a country ???
Hungary – our brand name has been – blackened, tared , scoulded , bruised & battered -” shamed” by this present Government, that factually sees us Hungary – standing alone isolated somewhat confused and bewildered – what and where – our FUTURE lies.
Democracy – is Dialogue.
Their is NO place in DEMOCRACY – for DICTATORSHIP “styled” rhetoric nor actioned agenda.
The nadir – of Hungarys magitude of problems – Scary.
p.s. – don’t go into a public hospital.
Don’t think Victor Orban and his Government – going to fix this somewhat in-humane situation over-night.