National Bank of Hungary policy makers keep base rate on hold

The central bank’s Monetary Council decided to keep the bank’s key rate on hold at 0.90 percent at a monthly policy meeting on Tuesday.

The Council also left the O/N central bank deposit rate at -0.05 percent.

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.

At the previous policy meeting, the Council raised the O/N deposit rate by 10 bp, marking the first policy tightening in years.

In a statement released after the meeting, the Council reiterated guidance issued after the monthly policy meeting in March.

The Council said inflation “will fluctuate around” the 3 percent central bank target in the coming quarters, while the measure of core inflation excluding indirect tax effects — a bellwether indicator of underlying inflation — is “expected to continue to rise until the autumn months and then to decline from the end of 2019”.