The central bank of Hungary has finally halted a two year program of monetary easing and pledged to hold rates at their current level until next year. This followed two straight years of monthly rate reductions until bank’s key rate reached its current 2.1 percent. Its president Gyorgy Matolcsy said only an unexpected threat to its 3 percent inflation goal would change the policy.
In its statement, the central bank wrote that “the central bank base rate has reached a level which ensures the medium-term achievement of price stability and a corresponding degree of support for the economy.” It added that current conditions suggested a period of continuing loose monetary conditions.
