Matolcsy: The National Bank of Hungary to maintain low base rate

Budapest, November 8 (MTI) – The National Bank of Hungary is likely to keep its base rate unchanged at 0.90 percent even if other central banks start tightening, the bank’s governor György Matolcsy said in an interview to business daily Világgazdaság.

“We have established and set a base rate for the long term, and even if the [US Federal Reserve] gradually tightens rates and the [European Central Bank] or the Japanese central bank possibly respond we believe that the conditions for the NBH’s loose monetary policy can remain in place until the end of 2017, or even, I believe, until 2018-2019,” Matolcsy said in the interview published on Tuesday.

The central bank’s steps over the past three years to lower interest rates, make cheap credit available to businesses, give banks incentives to buy government bonds and convert Hungarian households’ foreign currency-denominated debt, are responsible for about half of Hungary’s economic growth, he said. Matolcsy added that during the second half of his six-year mandate, the bank does not plan any further lending programmes and will make stability its main goal.