National Bank of Hungary policy makers keep base rate on hold

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 monthly policy meeting on Tuesday.

The council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in the spring of 2016.

However, the rate-setters have made use of “unconventional, targeted” instruments to ease monetary policy further.

After recent policy meetings,

the council has said it is “prepared for the gradual and cautious normalisation of monetary policy” but has signalled any tightening would start with adjustments to unconventional policy tools, before any changes to the base rate.

The council also left the O/N central bank deposit rate at -0.15 percent and the O/N collateralised loan rate at 0.90 percent at the meeting on Tuesday. The two rates demarcate the central bank’s “interest rate corridor”.

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