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Hungary’s National Bank Leaves Interest Rate Unchanged

Tamás Székely 2014.12.16.

Bloomberg reported that Hungary ’s National Bank (MNB) had left its benchmark interest rate at 2.1 percent, a record low for a fifth month, in line with its guidance for steady borrowing costs until the end of 2015. The monetary council has held borrowing steady costs since July, having reduced the benchmark in 24 consecutive steps from 7 percent in 2012. The central bank last month indicated it may maintain the “current loose monetary conditions for an extended period” to reach its 3 percent inflation target.

Meanwhile Hungarian consumer prices fell 0.7 percent in November from a year earlier, the biggest drop since at least 1968 as food and fuel prices fell, according to the Central Statistics Office (KSH). The decline last month was bigger than the 0.5 percent median estimate of nine economists surveyed by Bloomberg, sparking speculation that the central bank may abandon its pledge for steady rates. The figure may lead to a cut next year, analysts said.

MNB also announced that Hungary’s current account had posted a surplus of 231.6 million euros in October. The surplus was down from 865.5 million euros in September and 263.7 million euros in August. Hungary’s external financingcapacity – a combined surplus of the current and capital accounts — came to 586.3 million euros in October. MNB will publish a quarterly current account report for the third quarter on 23rd of December.

via bloomberg.com and hungarymatters.hu photo: MNB – public domain


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