Hungary raises benchmark rate to 5.4 pct

BUDAPEST, April 26– In line with analyst expectations, the Monetary Council of the Hungarian National Bank has raised the central bank base rate by 100 basis points to 5.4 percent, the bank said here on Tuesday. In a statement, the council said that the Russia- Ukraine conflict has “posed a much higher risk than usual to the outlook for inflation.”

BUDAPEST, April 26 (Xinhua) — In line with analyst expectations, the Monetary Council of the Hungarian National Bank (MNB) has raised the central bank base rate by 100 basis points to 5.4 percent, the bank said here on Tuesday.

In a statement, the council said that the Russia-Ukraine conflict has “posed a much higher risk than usual to the outlook for inflation.”

“The Monetary Council deems it necessary to continue the tightening of monetary conditions and to continue the base rate tightening cycle by taking a decisive step in order to anchor inflation expectations and mitigate second-round inflation risks,” it said.

This is the eleventh rate hike by MNB since June 2021. The bank increased the base rate by 30 basis points to 0.9 percent on June 22, 2021. Previously, the MNB’s base rate had been on hold at 0.6 percent since July 2020.

The rate has been steadily increasing since then, in line with the growing inflation rate.

According to the latest official data released on April 8, the inflation rate in Hungary stood at 8.5 percent in March, well over the three percent target set by the MNB. The bank originally forecast a 7.5-9.8 percent inflation rate for this year.

On Tuesday, the MNB also raised the overnight (O/N) deposit rate by 100 basis points to 5.40 percent and the O/N and one-week collateralized lending rates by 100 basis points to 8.40 percent. Enditem

ANA NEWS WIRE Disclaimer:
The African News Agency (ANA) is a news wire service and therefore subscribes to the highest standards of journalism as it relates to accuracy, fairness and impartiality.
ANA strives to provide accurate, well sourced and reliable information across Text, Images and Video. Where errors do appear, ANA will seek to correct these timeously and transparently.
The ANA platform also contains news and information from third party sources. ANA has sought to procure reliable content from trusted news sources but cannot be held responsible for the accuracy and opinions provided by such sources on the ANA platform or linked sites.
The content provided for on the ANA News Wire platform, both through the ANA news operation and via its third party sources, are for the sole use of authorised subscribers and partners. Unauthorised access to and usage of ANA content will be subject to legal steps. ANA reserves its rights in this regard.
ANA makes every effort to ensure that the website is up and running smoothly at all times, however ANA does not take responsibility for, and will not be held liable for times when the website is temporarily unavailable due to technical issues that are beyond our control.