Base rate cut by 75 basis points
October 26, 2023
The Monetary Council of the National Bank of Hungary (MNB) cut the base rate by 75 basis points to 12.25%. The MNB last raised the base rate on 27 September 2022, by 125 basis points to 13.0% and announced the end of the base rate hike cycle.
The MNB then turned to new instruments and raised the interest rate on its regular overnight deposit tenders to 18%.
The latest rate cut surprised both analysts and markets. The MNB had recently announced its intention to maintain a positive real interest rate. After the official inflation rate fell to 12.2% in September, the real interest rate remains in positive territory, but the monetary authorities have exhausted their room for manoeuvre.