Hungary central bank cuts base rate by 15 basis points

Hungarian central bank rate-setters at a regular meeting on Tuesday cut the base rate by 15 basis points to 0.60 percent.

The policy makers cut the base rate by 15 basis points for the second month in a row after leaving it unchanged for a little more than four years.

NBH deputy governor Barnabás Virág had said days after the June policy meeting that he would propose another 15bp reduction to the base rate at the next policy meeting, but he added that a rate under 0.60 percent was “not a possibility”.

The Council decided to leave the O/N deposit rate at -0.05 percent and the O/N and one-week collateralised loan rates at 1.85 percent.

The O/N deposit rate and the collateralised loan rate mark the bottom and the top, respectively, of the Hungarian central bank‘s “interest rate corridor”. The base rate is paid on mandatory reserves and preferential deposits.