Hungary central bank leaves rates unchanged

As expected, the Hungarian Central Bank (MNB) left their base rate unchanged at +0.9% this morning.

It’s the 28th consecutive pause for the base rate in the current easing cycle.

Also, policy makers left the overnight deposit rate at -0.15%, as expected.

Yesterday, Hungary’s 10-year government bond yields rallied to its highest level since early July amid expectations that the central bank could tweak a swap tool that encourages banks to buy long-term bonds. 10’s backed up to +3.64%.

Inflation ran at +3.4% in August, above the mid-point of the bank’s +2-4% target range. Don’t expect the MNB to get worried unless the forint weakens significantly, lifting import prices.

The forint is trading up +0.28% at €324.00.

Governor Matolcsy is to hold his post-rate decision statement at 09:00 EDT