The Hungarian National Bank (MNB) raised key interest rate from 11.75% to 13%, above expectations of a 100 basis point increase.
The 125 basis point rate hike also ends a 16-month cycle of interest rate hikes, but monetary tightening will continue, said central bank’s governor György Matolcsy. At the current interest rate level, there is no reason for further hikes. However, the fight against inflation will be further intensified by other mean. From October 1, the MNB will tighten forint liquidity by raising the reserve requirement ratio, introducing regular discount bond auctions and introducing a deposit facility with longer maturities.