Central bank leaves base rate unchanged at 13 percent

At either end of the interest corridor, the 12.5 percent O/N deposit rate and the 25 percent O/N secured loan rate were also kept in place.

The decision was in line with the expectations of analysts.

In a statement released after the meeting, the Council said it was necessary to maintain the current level of the base rate over a prolonged period, which it said would ensure that inflation expectations are anchored and the inflation target is achieved in a sustainable manner.

It said the central bank was constantly assessing incoming data and developments in the inflation outlook and was “ready to take appropriate actions if risks increase”.

The Council underlined that the central bank will continue to take into account persistent changes in risk perceptions when setting the conditions of the O/N instruments introduced last October.

At a press conference after the meeting, National Bank of Hungary deputy governor Barnabas Virag said disinflation was set to begin accelerating in the coming months and there was a good chance that inflation would fall into the single digits by the end of the year.

A quarterly Inflation Report discussed by policymakers at the meeting shows the central bank puts average annual inflation this year in a range of 15.0-19.5 percent, unchanged from the forecast published in the previous report late in December. It puts inflation at 3.0-5.0 percent in 2024, up from 2.3-4.5 percent forecast in the December report.