Economics
Hungary Hikes More Than Expected, Flags Rate Convergence
- Central bank raises monthly base rate to 2.9% from 2.4%
- Deputy Governor expects persistent inflationary effects
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Hungary raised its base interest rate more than expected after spiraling inflation failed to slow and the central bank said it would align its two main policy instruments in the first half of this year with monthly tightening steps.
The National Bank of Hungary boosted the three-month required reserve rate by half a point to 2.9% on Tuesday, more than the median estimate in a Bloomberg survey of a 30 basis-point move. It also raised the ceiling on the interest-rate corridor to 4.9% from 4.4% to make way for further monetary tightening via the weekly deposit rate.