MNB policymakers raise base rate 30 bp to 0.90%

MNB

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The Monetary Council of the National Bank of Hungary (MNB) decided to raise the central bank base rate by 30 bp to 0.90% at a monthly policy meeting on Tuesday.

Central bank policymakers had earlier flagged a possible rate rise at the monthly policy meeting in June against the backdrop of spiking inflation.

MNB policymakers had kept the base rate on hold at 0.60% since last summer, but inflation reached 5.1% in both April and May, well outside of the +/- one-percentage-point tolerance band around the central bank's 3% mid-term target.

The Council also decided on Tuesday to leave the O/N deposit rate at -0.05% and the O/N and one-week collateralized loan rates at 1.85%.

The O/N deposit rate and the collateralized loan rate mark the bottom and the top, respectively, of the central bank's "interest rate corridor". The base rate is paid on mandatory reserves and preferential deposits.

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