National Bank of Hungary keeps base rate on hold, as expected

Budapest, April 25 (MTI) – The National Bank of Hungary’s Monetary Council decided to keep the central bank’s key rate on hold at 0.90 percent at a meeting on Tuesday, as expected.

The council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting last May. However, the rate-setters have made use of “unconventional, targeted” instruments to ease monetary policy further, such as placing a limit on the central bank’s main instrument for sterilising liquidity as well as modifying the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates.

At the meeting on Tuesday, the council left the interest rate corridor unchanged, with the O/N collateralised loan rate at 0.90 percent and the O/N central bank deposit rate at -0.05 percent.

In a statement released shortly after the meeting, the council repeated its earlier stand on keeping the base rate on hold “for an extended period”, while staying prepared to ease monetary conditions with unconventional instruments.