Central Bank Keeps Base Rate On Hold, As Expected

  • 23 Aug 2017 9:00 AM
Central Bank Keeps Base Rate On Hold, As Expected
The central bank’s Monetary Council decided to keep the bank’s key rate on hold at 0.90% at a meeting, as expected. 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, such as placing a limit on the central bank’s main instrument for sterilising liquidity as well as modifying the interest rate corridor, a band around the base rate that prevents extreme fluctuations of interbank rates.

At its meeting, the council left the interest rate corridor unchanged, with the O/N collateralised loan rate at 0.90% and the O/N central bank deposit rate at -0.05%.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

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