Monetary Policy Held Steady in Hungary and Eased in Israel

February 23, 2009

Magyar Zembeti Bank, Hungary’s central bank, left its key interest rate at 9.5%  as expected and released a statement that stressed the need to preserve financial market stability.  The forint, like several Eastern European currencies, has been under selling pressure, a development that has also weighed on the euro.

The Bank of Israel somewhat unexpectedly cut its key interest rate by a further 25 basis points to 0.75% and defended its action with a statement that projects zero growth in 2009, inflation at below its 1% range target floor, and observed that many central banks have reduced rates to similarly ultra-low levels. The Bank of Israel will complement low interest rates with unconventional other stimulative steps to secure a return to in-target inflation.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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