At its 24 January monetary policy meeting, the Central Bank left the base rate unchanged at 7.00%. The move took the market by surprise, as most analysts had expected the Bank to raise interest rates again. The decision followed on from the two 50 basis-point increases in November and December that so angered President Viktor orban, who had opposed the rate hikes. In response, the government, backed by a comfortable two-thirds majority in Parliament, pushed though a controversial reform of the Central Bank, which was widely criticized as an attempt to curb the Bank's sovereignty. Moreover, the reform contributed to the collapse of the negotiations between the government and the IMF/EU on a EUR 15-20 billion bailout in December. The orban administration, however, has significantly softened its tone since early January, pressured by the continued depreciation of the forint and rising government bond yields. In particular, the government has stressed its commitment to reach an agreement with the IMF/EU before April. The Central Bank judges negotiations with the IMF/EU to be the most important factor shaping perceptions about the economy. Despite leaving interest rates unchanged, monetary authorities maintained a hawkish tone, stating that if perceptions about the economy and the outlook for inflation deteriorate significantly further, it may prove necessary to raise interest rates again.
Hungary Monetary Policy
Central Bank surprises by leaving rates unchanged
January 24, 2012
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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.