The council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in May.

However, the rate-setters have made use of “unconventional, targeted” instruments to ease monetary policy further, such as placing a limit on the central bank’s main instrument for sterilising liquidity as well as modifying the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates.

At the meeting on Tuesday, the Council left the interest rate corridor unchanged, with the O/N collateralised loan rate at 0.90 percent and the O/N central bank deposit rate at -0.05 percent.

NBH raises 2017 inflation forecast to 2.6 pc The central bank raised its CPI forecast for 2017 to 2.6 percent in its quarterly Inflation Report from 2.4 percent in the previous report published in December.

It did not change the 3 percent forecast for 2018 and in a new set of data also predicted 3 percent inflation in Hungary for 2019.

The NBH is predicting 3.6 percent GDP growth this year, unchanged compared to its earlier forecast in December. The 3.7 percent growth expected for next year is also in line with the December projections.

For 2019 the NBH is expecting GDP growth to slow to 3.2 percent.

The central bank will not publish the full Inflation Report until Thursday.

Republished with permission of Hungary Matters, MTI’s daily newsletter.