2021-12-14 14:13
publication
2021-12-14 14:13
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The National Bank of Hungary raised interest rates for the seventh time in a row to fight inflation. This time, however, the increase is largely symbolic.
By the decision of the National Bank of Hungary (MNB), the reference interest rate was increased from 2.1 percent. up to 2.4 percent Such a move was in line with the expectations of most market analysts and commentators.
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Importantly, in recent weeks, not the reference rate, but the deposit rate has become the primary instrument of influence of the MNB. The price raised at the Thursday’s auctions is now 3.3%. – 1.6 percentage points more than a month ago. By raising the reference rate, the MNB narrows the corridor of action in a way, because the bank’s plans are to bring the two rates closer to each other – once the goal of curbing inflation is achieved.
It is worth noting, however, that this is the seventh consecutive rate hike at Lake Balaton. In June, the MNB made its first raise in nearly a decade (from 0.6% to 0.9%), and this move was repeated in July (from 0.9% to 1.2% – then we were dealing with an increase that exceeded expectations), august
(from 1.2% to 1.5%), in September (from 1.50% to 1.65%), in October (from 1.65% to 1.8%) and in November (from 1.8% to 2.1%).
Interest rates in Hungary are currently the highest since June 2014. In the following quarters, the “nephews” continued the cycle of cuts, which brought their rates down to 0.9 percent, and in the face of the pandemic, they lowered this rate to 0.6 percent.
The number one reason for the first cycle of interest rate increases in Hungary in almost a decade is inflation, which in November reached 7.4%. This result is lower than the Polish result (7.7%), where the MPC raised rates to 1.75%. in December. The Czech Republic is making similar moves (rates at 2.75%), where inflation is the lowest (6% in November).
Among the countries in our region, interest rates will be decided this year by the Czech central bank (December 22). Earlier, because tomorrow the decisions will be made by the US Federal Reserve, and on Thursday we will have the day of, among others, with the European Central Bank, the Swiss National Bank or the Bank of England.
Michał Żuławiński
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