Financial News: Hungary Central Bank Holds Key Rate As Expected

Hungary Central Bank Holds Key Rate As Expected

10/22/2024 - 09:25:00 (RTTNews)

(RTTNews) - Hungary's central bank paused its easing cycle on Tuesday amid concerns about the currency weakness.

The Monetary Council of the Magyar Nemzeti Bank, led by Governor Gyorgy Matolcsy, decided to hold the base rate at 6.50 percent. The overnight central bank deposit rate was retained at 5.50 percent and the overnight collateralized loan rate was left unchanged at 7.50 percent.

Strong wage growth and loose fiscal policy will make it difficult for the central bank to meet its inflation target on a sustained basis over the coming year, Capital Economics' economist Nicholas Farr said.

The interest rates will be lowered less than most analysts other expect, to 5.00 percent by end-2025, the economist added.

In September, consumer price inflation eased to central bank's target of 3.0 percent from 3.4 percent in August. This was the weakest since January 2021.

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