The National Bank of Hungary’s Monetary Council left the central bank’s base rate on hold at 0.90pc at its latest policy meeting, a decision in line with expectations. The council also narrowed the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates. The O/N collateralised loan rate, the top of the range, was lowered from 1.05pc to 0.90pc, while the O/N central bank deposit rate remained unchanged at -0.05pc. The interest rate for the one-week collateralised loan was lowered from 1.00pc to 0.90pc. The Monetary Council reiterated its stand on keeping the base rate on hold for an “extended period” while keeping the option of using unconventional policy instruments open. “If the assumptions underlying the [NBH’s] projections hold, maintaining the current level of the base rate for an extended period and the loosening of monetary conditions by the change in the monetary policy instruments are consistent with the medium-term achievement of the inflation target and a corresponding degree of support to the economy,” the council said.
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