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HomeEconomyHungary's central bank likely to end rate hike cycle after September -Villag

Hungary's central bank likely to end rate hike cycle after September -Villag

SEGDE, Hungary (Reuters) – Hungary’s central bank may consider ending a long-term meeting after next Tuesday’s meeting, Barnabas Virag, deputy governor of Hungary’s central bank, told reporters on Thursday. More than a year of interest rate hike cycle, when interest rates will be raised again.

Rate-setters in Central Europe were the fastest to start raising rates last year and have accelerated their pace this year as inflation has soared, but some are starting to slow or possibly end the tightening cycle.

The National Bank of Hungary (NBH) raised the benchmark interest rate by 50 basis points to 11. 75% last month, but Virag has since raised the prospect of a halt to the rate hike cycle since June 2021.

“We need to assess the end of each month (cycle),” Villag told reporters on the sidelines of an economic conference. “We should already have it on the table in September and decide how we end it based on the options available.”

He said decide the outcome The key factors in the cycle will be positive forward-looking real interest rates, balancing inflation risks, the outcome of financing negotiations with the EU, and strengthening monetary transmission through tightening liquidity conditions.

Virag said banks may raise interest rates next Tuesday 50, or 100 basis points, after which “all options are on the table,” including ending the rate hike immediately or stepping out of the cycle in several smaller steps.

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