October 22, 2024 – 2:20 pm
The Monetary Board of Magyar Nemzeti Bank (MNB) did not change the key interest rate at its meeting on Tuesday, so it remained unchanged at 6.5%, and neither side of the interest rate path changed, according to the MTI report. The lower edge of the interest corridor, the one-day deposit rate, was 5.75 percent, while the upper edge, the one-day loan rate, remained at 7.75 percent. decision Meets analysts' expectations.
In September, the multinational bank's monetary board cut the central bank's key interest rate by 25 basis points and cut both ends of the interest rate corridor by a similar amount. The Council discussed two options: the option of reducing the interest rate by 25 basis points and not changing interest rates.
Before that, until August, the central bank lowered interest rates at a slow pace: it cut them by 0.25 percentage points three times in a row.
Last April, Barnabas Viraj, vice president of the multinational bank, said the volatile risk environment required a cautious and patient approach to interest rate policy. He added that monetary policy entered a new phase in April, and is progressing at a slower pace than before, and further reduction in the base interest rate is determined on a basis that depends on data from month to month. In the online press conference after the interest rate decision in July, MNB's vice president described “one or two” further rate cuts as realistic this year, expecting the base interest rate to be between 6.25 and 6.5 percent by the end of the year.
MNB can better influence the operation of the economy by changing the interest rate: at low interest rates, people and banks get cheaper loans, which makes the economy spin, but in return, inflation can easily develop. When the interest rate rises, consumption falls, which can moderate inflation. Raising interest rates also enhances the value of the forint against other currencies.
