World Economy

Hungary Rate Unchanged

Hungary Rate UnchangedHungary Rate Unchanged

The Hungarian central bank left its benchmark interest rate unchanged as policy makers stuck to their pledge to focus on unconventional monetary easing if it needed to combat below-forecast inflation and limit an economic slowdown. The three-month deposit rate will remain at a record-low 1.35% for a seventh month, matching the forecasts of all 17 economists in a Bloomberg survey. The National Bank of Hungary will publish a statement in Budapest late Tuesday to explain its decision. Policy makers are holding back from rate cuts even as investors price in further reductions in the benchmark. Vice Governor Marton Nagy said Jan. 29 that the regulator won’t cut its main rate and would instead focus on overnight loans and deposits as an outlet for possible monetary easing. Derivatives contracts show investors are unconvinced. Forward-rate agreements used to wager on borrowing costs in six months showed bets for 15 basis points in reductions to the benchmark rate, the most in three weeks. The forint has gained 2.6% against the euro this year, the fourth-best performance globally.