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Central Bank in Hungary Cuts Base Rate Again

• 22 May 2024 11:52 AM
• Hungary Matters

Hungarian central bank (NBH) rate-setters cut the base rate by 50 basis points to 7.25% at a regular policy meeting.

The Council also decided to lower the symmetric interest rate corridor in tandem, bringing the O/N deposit rate to 6.25% and the O/N collateralised loan rate to 8.25%.

At its April meeting, the Council had cut the base rate by 50bp.

“The volatile financial market environment and the risks to the outlook for inflation continue to warrant a careful and patient approach,” the Council said in a statement after the meeting.

The Council noted it was constantly assessing incoming macroeconomic data, the outlook for inflation and developments in the risk environment and decisions on any further reductions in the base rate would be taken “in a cautious and data-driven manner”.

Deputy central bank governor told a press conference after the meeting that accelerating economic growth, historically high foreign exchange reserves, a persistent improvement in the current account balance and a cautious approach to monetary policy have contributed to an improvement in the country’s risk perception.

Barnabás Virág said the volatile financial market environment and the risks to the outlook for inflation continue to warrant a careful and patient approach and that the Council was unanimous in its opinion that preserving financial market stability remains a priority.

Full report available here

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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.

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