Magyar Nemzeti Bank

January 24, 2017

Hungary’s central bank base rate has been at 0.90% since a third consecutive monthly cut 0f 15 basis points administered last May. Officials voted at this month’s meeting not to change the rate. While discussing circumstances that might warrant a further easing in the future through unconventional means, a released statement makes no asymmetric hint about a possible tightening. A continuing pick-up in GDP is gradually reducing unused capacity. Although expected inflation remains historically low, a 3% targeted inflation rate is projected to be attained during the first half of 2018. The statement mentions an uncertain global financial environment warrants “a watchful approach to monetary policy” and concludes that ” If subsequently warranted by the achievement of the inflation target, the Council will stand ready to ease monetary conditions further using unconventional, targeted instruments.” Prior to August 2012, the central bank base rate was at 7.0%, and now it is 0.90%.

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



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