Central Bank Governor Welcomes Budget Cuts, Sees Further Rate Hikes in Hungary
- 30 Dec 2021 8:59 AM
- Hungary Around the Clock
MNB governor Gyorgy Matolcsy welcomed the government spending cuts announced last week in an interview with Magyar Nemzet.
However, he added, additional measures are needed to bring the budget deficit target down to 3% of GDP as soon as possible.
The number one enemy of central banks is inflation, he declared, adding that the most effective way to defend against this is to raise interest rates.
Matolcsy promised that the MNB’s cycle of predictable base rate hikes, which began in June, will continue in 2022.
It is necessary to raise interest rates until the inflation outlook returns to near the 3% target in a sustainable manner, he added.
The base rate will be raised in the first half of 2022 and will again match the level of the one-week deposit rate, Matolcsy said.
MTI Photo: Tamás Kovács
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