UPDATE 2-Hungary central bank flags more 15bps rate hikes

- Advertisement -

(Rewritten with comments from the Lieutenant Governor)

- Advertisement -

WARSAW, Oct 1 (Businesshala) – Hungary’s central bank will raise interest rates by 15 basis points in the coming months as inflationary pressures mount, deputy governor Barnabas Virag said on Friday.

- Advertisement -

Virag, the rate-setter responsible for communicating the bank’s policy plans, said the tight cycle that began in June would continue as long as the inflation outlook justified it.

“It’s a long road and I think we are far from the end,” Virag said of the hike ahead.

- Advertisement -

Last month, the bank raised its base rate by 15 basis points lower than expected to 1.65%, slowing the pace of hikes.

“The size of our September move is indicative in terms of the decisions to be taken in the coming months,” Virag reiterated the comments made last month. Forint liquidity.

Virag had earlier told a conference in Warsaw on Friday that rising inflation posed risks to Central European economies.

His remarks came a day after the Czech central bank delivered a higher-than-expected 75-basis-point rate hike to 1.50% and said more would follow to rein in inflation.

Lower-than-expected gains last month in Hungary sharply reduced its foreign exchange.

Asked about that slight drop, Virag said the bank is “more interested in more sustainable trends, not short-term volatility.”

Virag said the central bank, which has already started reducing its bond purchases, will continue to pull out of its QE programme. He added that managing liquidity “appropriately” will also be an important part of its policy response.

“We have more solutions at our disposal… (to enhance the effectiveness of monetary policy transmission in the coming months),” he said.

The bank held a number of FX swap tenders this week, which award the euro to banks. As part of its stringent measures, the bank last month also decided to liquidate its foreign currency exchange facility, which provides additional liquidity. (Reporting by Anna Koper, Writing by Giles Elgood and John Stonestreet Editing by Krysztina Than)


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox