Hungarian National Bank’s base rate decision not surprising for experts
The Monetary Council of the National Bank of Hungary (NBH) decided to leave the central bank base rate unchanged at 6.50pc at a monthly policy meeting on Tuesday.
The Council also left the O/N deposit rate at 5.50pc and the O/N collateralised loan rate at 7.50pc. The rates mark the ends of the central bank’s symmetric interest rate corridor, the Hungarian News Agency wrote.
In a statement released after the meeting, the Council said the decision to keep the base rate on hold was taken “in line with the stability-oriented approach”.
The Council affirmed its commitment to achieving the inflation target in a sustainable manner and said maintaining tight monetary conditions was warranted.
“The Council is constantly assessing incoming macroeconomic data and factors influencing the inflation outlook, in particular repricings at the start of the year and the stability of financial markets, based on which it will take decisions on the level of the base rate in a cautious and data-driven manner from meeting to meeting,” the policy makers said.
“Monetary policy contributes to the maintenance of financial market stability, the anchoring of inflation expectations consistently with the central bank target and, as a result, to the achievement of the inflation target in a sustainable manner by ensuring positive real interest rates,” they said.
Addressing the central bank’s latest quarterly Inflation Report, discussed at the meeting, the Council said the consumer price index remained “volatile”, but underlying inflation was projected to evolve more favourably over the coming year compared to the September forecast due to a stronger forint and an improved external cost environment.
The fresh report puts average annual inflation at 4.4pc in 2025, 3.2pc in 2026 and 3.3pc in 2027.
The minutes of the meeting will be published at 2:00 in the afternoon on January 14.
Read also:
- New forint coins honour Hungarian astronauts – visuals
- Péter Magyar: National Bank Governor Varga was unwilling to surrender to mafia boss PM Orbán
Click for more National Bank-related articles.