Magyar Nemzeti Bank

August 26, 2014

Monetary Council officials signaled last month that a two-year cycle of central bank reductions totaling 490 basis points from 7.0% prior to August 2012 to the current level of 2.10% had been completed.  So it was no surprise to investors to learn today of this month’s Council decision to leave the rate at 2.10%.  A statement released after the policy meeting observed positive economic growth, a continuing but gradually diminishing output gap and sub-target underlying inflation. 

The disinflationary impact of the real economy is likely to diminish and, with current monetary conditions maintained, inflation is likely to move into line with the target over the medium term. The Council judges that, based on available information the current level of the central bank base rate is consistent with the medium-term achievement of price stability and a corresponding degree of support for the economy.

The current interest rate level appears likely to remain unchanged for a couple of quarters going forward.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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