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NBH LEAVES BASE RATE ON HOLD

 

Rate-setters of the National Bank of Hungary left the base rate unchanged at 0.90% and the central bank O/N deposit rate at -0.05% at a regular meeting. The Monetary Council has not changed the base rate since May 2016. In a statement issued after the meeting, the Council said it would continue to decide on adjustments to monetary policy on a quarterly basis, saying it would carry out a “comprehensive assessment of macroeconomic developments” in the next Inflation Report, due to be published when the rate-setters meet in March. The Council reiterated that it expects CPI to “return to the [+/- 1pp] tolerance band by the end of the first quarter of 2020, and to stabilise at the 3% inflation target in the second half of the forecast horizon”. The Council said sentiment on global markets had “rather deteriorated” since the last policy meeting, citing the coronavirus outbreak as a reason. The Council noted a slowdown in Hungary’s growth rate, but said the economy was expected to continue to expand at a clip of “at least two percentage points” over growth in the euro zone.