Economics
Hungary to Squeeze Cash Deposits to Ease Policy With Rates Held
- Central bank puts 900 billion-forint cap on deposit facility
- Rate setters kept benchmark rate unchanged for fourth month
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Hungary’s central bank is cutting the amount of cash banks can keep in its main deposit instrument as it seeks to ease policy without adjusting the benchmark interest rate.
Domestic lenders will be able to place no more than a total of 900 billion forint ($3.6 billion) in three-month deposits at the three last monthly tenders of the year, the National Bank of Hungary said in a statement Tuesday. That compares with the current 1.6 trillion forint held in the facility and with the a year-end estimate of 1 trillion forint in a Bloomberg survey of seven economists. Policy makers left the three-month deposit rate at 0.9 percent, matching the forecasts of all 21 economists in a Bloomberg survey.