The Wall Street Journal reports that Hungarian central bank officials are keen to reduce the country’s debt exposure, and that this is behind the bank’s extended run of rate cuts. This saw the country’s primary interest rate plummet from 7 percent to 2.1 percent in consecutive monthly reductions over two years. With rates now low, the bank intends to keep them there for the forseeable future.
“We don’t want to become a panicky central bank with hasty moves, one which doesn’t prepare well ahead,” Adam Balog, deputy central bank governor, told the WSJ. “The policy seen in the past when raising interest rates right away [when an external shock hit] as the reaction to a financial-stability concern is unfortunate.”
