At its 29 November policy meeting, the Central Bank voted to raise the base rate by 50 basis points to 6.50%. The decision was widely expected by market analysts after international rating agency Moody's unexpectedly cut Hungary's sovereign credit rating a notch to Ba1, which is now below investment grade. The move was aimed at preventing capital flight and further depreciation of the currency. The Bank stated that the depreciation of the forint in recent months is a threat to meeting the 3 per cent inflation target. Exchange rate depreciation is also increasing the vulnerability of the domestic financial system. Moreover, the Bank indicated that currency depreciation has caused a deterioration in the inflation outlook and increased the need for balance sheet adjustment in the economy. Against this backdrop, monetary authorities expressed that if the outlook for inflation and risk perceptions remain persistently unfavourable, it may prove necessary to raise interest rates further in the coming months.
Hungary Monetary Policy
Central Bank raises rates in an attempt to shore up the forint
November 29, 2011
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Hungary Economic News
October 11, 2016
In September, consumer prices rose 0.2% from the previous month, contrasting August’s 0.4% decrease.
October 7, 2016
According to preliminary data released by the Statistical Institute (KSH) on 7 October, industrial output in August rose a working-day adjusted 3.5% from the same month last year, rebounding from July’s 0.1% decrease and marking a four-month high. On a monthly basis, industrial production increased a seasonally- and working-day adjusted 1.6% in August, which followed July’s 0.3% decrease.
September 26, 2016
The GKI economic sentiment indicator advanced slightly from August’s minus 3.9 points, which was the lowest reading in over two years, to the still-low level of minus 3.6 points in September.
Hungary: Central Bank leaves base rate at 0.90%, continues easing monetary conditions by capping main deposit facility
September 20, 2016
The Central Bank of Hungary (NBH) held all rates constant at its 20 September monetary policy meeting, but continued easing monetary policy conditions by using unconventional monetary policy instruments.
September 9, 2016
In August, consumer prices fell 0.4% over the previous month, coming in below July’s softer 0.2% decrease.