articleimg-1
Aug 26, 2020

Hungarian rate-setters keep central bank’s base rate on hold

The Council said it “supports price stability, the preservation of financial stability and the recovery of economic growth in a sustainable manner”.

 

Rate-setters kept the Hungarian central bank’s base rate on hold at 0.6 percent.

According to MTI, they also kept the interest rate corridor unchanged at their regular rate-setting meeting. At their last meeting in July, the board cut the base rate by 15 basis points. The Council also decided to leave the O/N deposit rate at -0.05 percent and the O/N and one-week collateralized loan rates at 1.85 percent.

In a statement released after the meeting the Council reiterated its earlier stand on the base rate, saying it “supports price stability, the preservation of financial stability and the recovery of economic growth in a sustainable manner”, while pressing the importance of maintaining short-term yields “at a safe distance from a range close to zero”.

The Council announced it would increase the amount of government securities the NBH buys weekly in the framework of an assets purchase program in view of the risks posed coronavirus pandemic as well as a higher government financing requirement due to stimulus spending in the face of the Covid-19 crisis.

Photo credit: National Bank of Hungary