Hungarian National Bank

October 16, 2018

As expected Hungary’s central bank rates were left unchanged at the monthly policy review. The last Base Rate Change was a reduction of 15 basis points to 0.90% in May 2016, and the last change in the overnight deposit rate was a 10-basis point cut to -0.15% made in September 2017. A released statement projects a sustained convergence of total CPI inflation (now at 3.6%) and core inflation (2.4%) on the 3% target from mid-2019. Forward guidance for an eventual normalization of the currently very accommodative monetary stance is provided in the concluding paragraph.

The Council is prepared for the gradual and cautious normalisation of monetary policy, which will start depending on the outlook for inflation. The inflation target is still expected to be achieved in a sustainable manner from mid-2019. To ensure this, in the Council’s assessment, maintaining the current level of the base rate and the loose monetary conditions is necessary.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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