Hungary votes to keep central bank base rate unchanged at 1.35%

By Tali Rackner

Norfolk, Va., Sept. 22 – The Monetary Council of Hungary’s Magyar Nemzeti bank voted to maintain the central bank base rate at 1.35% at its meeting on Tuesday. This follows July’s rate decrease by 15 basis points from 1˝%, June’s reduction to 1˝% from 1.65% and May’s decrease to 1.65% from 1.8%.

In addition, the three-month deposit will replace the former two-week deposit as the main policy instrument of the bank.

Based on the council’s decision, the new interest rates are as follows:

• Three-month MNB deposit at 1.35%;

• Overnight central bank deposit, equal to three-month MNB deposit rate minus 100 bps, for a rate of 0.35%; and

• Overnight collateralized loan, or the interest rate on the three-month MNB deposit plus 100 bps, for a rate of 2.35%.

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