Hungary central bank hikes base rate again
Hungarian central bank (NBH) rate-setters, at a regular policy meeting on Tuesday, hiked the base rate by 50 basis points to 2.9 percent.
The members of the Monetary Council also hiked the interest rate corridor by the same degree.
In a statement released after the meeting, the Council said risks to inflation “continue to be on the upside”, adding that the risk of the central bank’s alternative scenario assuming a higher external inflation environment “has increased”.
“Persistently high commodity, crop, food and energy prices and elevated international freight costs continue to point to sustained external inflationary pressures,” the Council said.
“At the same time, the tight labour market, coupled with accelerating wage growth and a higher inflation environment, may lead to a further rise in inflation expectations and an increase in second-round inflation risks,” the policymakers added.
“Mitigating second-round inflation risks and driving expectations appropriately have necessitated the continuation of the base rate tightening cycle on a monthly basis and in greater increments than in December. As a result, the base rate will catch up gradually to the one-week deposit rate evolving in the coming months,” the Council said.
The one-week depo rate moved in tandem with the base rate from June until November, when the Council decided the central bank must be allowed to set it over the base rate to respond to an increase in short-term risks in financial and commodity markets “quickly and flexibly”. The rate now stands at 4.00 percent.
At a press conference after the meeting, NBH deputy governor Barnabás Virág said
the central bank was prepared to raise the one-week deposit rate further.
He added that the base rate has “started to catch up” with the one-week deposit rate. He said the base rate and the one-week deposit rate “could converge in the course of the first half of the year”.
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Source: MTI
2 Comments
Previously used this forum on occassions over the past (6) nine months – to commentate, that the – CORE -fundamentals of the Hungarian Economy – are trending in the incorrect or DANGEROUS territory.
This has been – FACT – for the past 6-9 months INTEREST Rate plus INFLATION increases.
These (2) two – are Major components used, in the anaylsis/study performance – of a countrys Economic & Financial performance – currently and future – that – Validate/Confirm – that the Economy of Hungury – is in Major Trouble.
The pressure on the forint – its Devaluation against other Major currencys – continues to be of Concern.
No Tourism – which represents 9.4 of Hungarys – GPD.
Property Market and its Broadsheet Landscape – that falls under the Property Market – which is Over-Flooded with Sellers to Buyers – will be a situation that will be CARNAGE – in this property – its Landscape in Hungary.
We build on – flats,apartments, houses, renovate houses to sell & rent, build new hotels & renovate old hotels and build new warehouse storage & distribution complexies.
Foreign Investment – hoping it returns like over the past (10) ten years – our Property Market – Residential and ALL the Landscape – under the Property Market in Budapest, Hungary – driven and pushed – to the levals – un-sustainable un-realistic levals – we continue to see – evan post February 2020 – by Foreign Investment from predominantly these (3) three countrys in this order :
(1) – China.
(2)- Vietnamese.
(3) – Germany.
The return of Foreign Investors – if – “Blessed off” by Government – watch the Fidesz “Modus Operandi” – if this is DRIVEN by Government – first DAMAGED – the Hungarian Citizens.
WATCH – the Property Market.
FACT of its True Position and Performance – in the Economy of Hungary over the past (9) nine months – its SOFTNESS and Weekening – Vulnerability – competing against any true comparison to Economic Rationality – through over Supply of Sellers to Buyers – we will see Carnage.
The “Veiled” present and TRUE – picture of the Broadsheet Property Market in Budapest, Hungary – lacks Candour – from those who speak or comment, to its Position, which in FACT – is in decline and lower values in the property market 6% to 10% – is a range to be expected – in the immediate future and depending on “other” factors – greater percentage exceeding 10% – could quite easily be a Factual case.
Then you read an article in DNH – that Rental Costs December 2020 to December 2021 risen between 10% to 13% which is without any real ortrue Economic Rational.
No tourism and who gets the “Blood” sucked out of them by either Hungarian landlords or Foreign Investors – who in the past 10 years have DRIVEN the Rental and Property Market to the ridiculous and Un-sustainable – in these BLEAK days the weakness of the Hungarian Economy, high levals we have to-day – Hungarians first and foremost get BLEED.
Tourism – represents 9.4 % of the GDP – of Hungary.
This is within the European Members – the highest tourism GDP – like we in Hungary have the Highest VAT rate of 27% and like we Hungary – again increase in past days – HIGH interest Rates.
Hungary – we have the Forint – under extreme pressure – losing its value against other major currencies.
Landlords – Hungarians or Foreign Investors in the rental market game – plenty of quality rental properties for those renting or considering to rent in Budapest, Hungary and this article examples your GLUTTONY.
Property Market & Rental Market in Budapest, Hungary – will not due to the mounting pressure on the WEAKENING Hungarian Economy – hold the levals – which have no true Economic rational – that they are to-day.
Havoc – is coming in the not to distant Future and its over-due – in the Rental/Property Markets in Budapest/Hungary.