Hungary holds base rate at 0.9%, aims to keep loose monetary terms

By Susanna Moon

Chicago, Nov. 21 – The Monetary Council of Hungary’s Magyar Nemzeti Bank decided to keep the central bank base rate unchanged at 0.9% at its meeting on Tuesday.

The country’s economic growth will gain speed over the forecast horizon while the unused capacity is “gradually absorbed as output grows dynamically,” according to a bank statement.

Meanwhile, inflation is expected to hit the target rate “in a sustainable manner” by mid-2019, the bank added.

Inflation fell to 2.2% and core inflation to 2.7% last month, somewhat below expectations.

After ticking up, the consumer price index will likely drop to the “bottom of the tolerance band” by year-end.

“The council considers it important that the loose monetary conditions have their effect not only at the short but also at the longer end of the yield curve,” the bank added.

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