Central Bank Raises Base Rate by 50 Basis Points in Hungary

  • 1 Jun 2022 10:43 AM
  • Hungary Matters
Central Bank Raises Base Rate by 50 Basis Points in Hungary
Hungarian rate-setters raised the central bank’s (NBH) base rate by 50 basis points to 5.90% at their regular policy meeting on Tuesday. The Monetary Council also expanded the two sides of the interest rate corridor by the same ratio.

In a statement released after the meeting, the Council said the increase in global uncertainty, fundamental inflation risks and the setting of an optimal interest rate level in terms of the sustainable achievement of the inflation target warranted the gradual continuation of the base rate tightening cycle.

The Council said it will continue the cycle of interest rate hikes until the outlook for inflation stabilises around the central bank target and inflation risks become evenly balanced on the horizon of monetary policy.

The NBH continuously monitors developments in financial market risks as well and stands ready to intervene in a flexible manner using every instrument in its monetary policy toolkit, if necessary, the policymakers said.

The Council reiterated that maintaining tighter monetary conditions for a longer period was warranted to manage increasing second-round inflation risks resulting from persistently negative supply effects.

Addressing a press conference after the meeting, NBH deputy governor Barnabás Virág said monetary policy tightening would “certainly continue in the second half of the year”.

He said inflation was seen rising in the short run, adding that May CPI could even be “over 10.5% “.

  • How does this content make you feel?

XpatLoop Media Partner

Hungary Matters

Launched in January 2014, this newsletter published on week days covers 'everything you need to know about what’s going on in Hungary and beyond', according to its publisher the state media agency MTI.

Explore More Reports

  • Central Bank Keeps Base Rate at 13%

    Central Bank Keeps Base Rate at 13%

    • 23 Nov 2022 8:55 AM

    Hungarian rate-setters left the base rate on hold at 13% at a regular policy meeting. The Council also decided on Tuesday to keep the central bank’s O/N deposit rate at 12.50% and the O/N collateralised loan rate at 25%.

  • Opinion: Speculation About Hungary’s Economic Outlook

    Opinion: Speculation About Hungary’s Economic Outlook

    • 2 Nov 2022 8:38 AM

    Left-wing and liberal analysts blame the government and the National Bank for the high price Hungarians are paying to regain the trust of the markets. A pro-government pundit is optimistic that Hungary can avoid recession – despite the global economic crisis.