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Index – Economy – MNB decided, the strategy remains

Index - Economy - According to London analysts, MNB will touch the base rate multiple times

25.08.2022. 10:12 AM

Magyar Nemzeti Bank (MNB) continues to keep the deposit tender for one week at an interest rate of 10.75 percent, as before. So the central bank is not tightening now. The monetary board meets next week, after which the reference rate may rise.

Thursday morning again 10.75 percent The central bank announced a one-week deposit tender at a reference interest rate. This is the same as MNB’s previous connection:

The base rate and the one-week rate are separated again only when absolutely necessary.

The Monetary Council meets next week on Tuesday, August 30. Then they are supposed to raise the base rate even more. Peter Verovacs, lead macroeconomist at ING, told our newspaper in this regard that “the bar has been shaken by the forint exchange rate. However, next week, there is no fairy tale, the rate-raising cycle must continue, and MNB must Stresses.Economy is basically healthy and this leads to higher inflation.Moreover,inflation has been higher than expected and we can slowly reach 20-22 percent inflation by the end of the year.For this reason,I think the central bank will raise the key rate as Not less than 100 basis points on Tuesday.”

Plans remain

According to ING macroeconomists, “There is a lot of money in the system now, so it is conceivable that liquidity will also have to be reduced” along with some other measures.

At the moment, no change in the central bank’s strategy is expected, and this may be possible at the end of September at the earliest, when a new inflation report will be prepared. It is clear that the Hungarian interest rate above 10 per cent stands out in the region.

See also  The Budget Board sees significant risks for the Hungarian economy in the next three years

(Cover Image: Janos Body/Index)

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