Magyar Nemzeti Bank

September 19, 2017

Hungary’s central bank Base Rate was retained at 0.90%, but the overnight deposit rate was lowered to negative 0.15% from -0.05%. A released statement declared,

The inflation target is expected to be achieved in a sustainable manner one additional quarter later, i.e. by the middle of 2019, following a delay of half a year indicated in the June projection. The Council lowered the overnight deposit rate by 10 basis points to -0.15 percent and left the base rate, the overnight and one-week lending rates unchanged. The Council considers that the external environment continues to pose a downside risk to inflation. In the Council’s assessment, maintaining the base rate and loose monetary conditions for an extended period are necessary to achieve the inflation target in a sustainable manner.

Officials estimate that underlying consumer price inflation is running currently at around 2% and expect headline inflation to fall between now and the end of this year. The Base Rate has been 0.90% since a cut of 15 basis points in May 2016. Officials anticipated Hungary’s real economy expanding by between 3% and 4% over coming years.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission. 

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