NBH Policy Makers Keep Base Rate On Hold

  • 25 Apr 2018 1:24 PM
  • Hungary Matters
NBH Policy Makers Keep Base Rate On Hold
The National Bank of Hungary’s Monetary Council decided to keep the central bank’s key rate on hold at 0.9% at a monthly policy meeting.

The council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in the spring of 2016.

However, the rate-setters have made use of “unconventional, targeted” instruments to ease monetary policy further.

The council also left the O/N central bank deposit rate at -0.15% and the O/N collateralised loan rate at 0.9% at the meeting on Tuesday.

In a statement released after the meeting, the council said that “maintaining the base rate and the loose monetary conditions at both the short and long ends for an extended period is necessary to achieve the inflation target in a sustainable manner”, echoing the policy stand voiced in previous months.

“The Council will closely monitor developments in monetary conditions and will ensure the persistence of loose monetary conditions over a prolonged period by using the extended set of monetary policy instrument,” the statement added.

Commenting on the newest of these policy instruments intended to flatten the yield curve, the council said the central bank would continue mortgage bond purchases and its monetary rate swap (MIRS) facility as programmes “continuously and for a prolonged period”, calling them “an integral part of the set of monetary policy instruments”.

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