NBH policymakers 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.

The Council also left the overnight central bank deposit rate at -0.15 percent and the overnight collateralised loan rate at 0.90 percent at the meeting on Tuesday.

“In the Council’s assessment, maintaining the base rate and the loose monetary conditions is still necessary to achieve the inflation target in a sustainable manner,” the rate-setters said in a statement after the meeting, reiterating a stand taken after other recent policy meetings.

The NBH sees CPI reaching the 3 percent target from the middle of 2019 as the temporary, inflation-boosting effects of oil price changes fade.

The Council said the volatile international environment “continues to suggest a more cautious approach” to monetary policy.

The rate-setters also said they would stick to using their current set of monetary policy tools.

AS we wrote today, Hungary’s budget deficit, excluding local councils, came to 1,491 billion forints at the end of July, reaching 109.6 percent of the 1,360.7 billion forint full-year target, the Finance Ministry confirmed in a second reading of data released, read more HERE.

Photo: Daily News Hungary – Alpár Kató

Source: MTI