World Economy

Hungary Keeps Key Rate on Hold

Hungary Keeps Key Rate on HoldHungary Keeps Key Rate on Hold

Hungary’s central bank kept its base interest rate on hold at a record low on Tuesday, sticking to its declared policy of using alternative instruments to ease monetary conditions, Reuters reported. In line with its earlier message, the bank reiterated that it was ready to loosen monetary conditions further via unconventional tools if needed. “If ... warranted by the achievement of the inflation target, the council will stand ready to ease monetary conditions further using unconventional, targeted instruments,” the Monetary Council said in a statement. The bank ruled out further cuts in the base rate from 0.9% last May, instead cutting the stock of three-month deposits by imposing limits on them as its key tool to drive down borrowing costs. “The big question this year will be how the central bank shapes liquidity conditions in the local money market, whether it introduces new tools in addition to the existing tools or whether it phases out some tools,” said Gergely Urmossy, an analyst at Erste Bank in a note.


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