Base rate cut again

The National Bank of Hungary’s Monetary Council has reduced the central bank’s base rate by 15 basis points to 1.8%, in line with market expectations. The Monetary Council said after the decision that the inflation outlook and cyclical position of the economy “point in the direction of a reduction in the policy rate and loose monetary conditions” for an extended period. “Cautious easing of the policy rate may continue as long as it supports the achievement of the medium-term inflation target”, it added. The council said investor sentiment had been “favourable” since the last policy meeting, but noted the impact of increased uncertainty surrounding Greece, mixed incoming macro-economic data from the US, the Ukraine-conflict and geopolitical tensions in the Middle East.