Hungary keeps rate at 0.9% amid room for growth, subdued inflation

By Susanna Moon

Chicago, July 26 – The Monetary Council of Hungary’s Magyar Nemzeti Bank decided to maintain its central bank base rate at 0.9% at its meeting on Tuesday.

As noted last month, the economy in Hungry is resuming growth after the slowdown early in the year. Despite that, some “capacity” lingers in the economy, and inflation remains entrenched below the target, according to a bank announcement.

“Looking ahead, the disinflationary impact of the domestic real economic environment is gradually decreasing,” the bank added.

In June, annual inflation held steady and core inflation dropped from the previous month. Underlying inflation point to a moderate inflationary environment as “persistently low global inflation” constrains the growth of the country’s consumer price inflation, the bank noted.

Inflation will hold below the 3% target over the forecast period and comes close to it in the first half of 2018.

The council said on May 24 that it had continued to loosen its monetary policy with another cut in the central bank base rate by 15 basis points to 0.9% from 1.05%.

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