Hungary raised the key interest rate as the national currency (forint) formed near the all-time low, following the central bank’s decision to ease the pace of monetary tightening.
The one-week deposit rate rose by 30 basis points to 6.75%, the highest level in the EU and in line with estimates.
Central Bank Deputy Governor Barnabas Virag said the central bank would maintain this monthly growth rate, raising it to 7.05% by the end of June.
The forint fell on Tuesday, near a record low, as policymakers halved the rate hike for the key interest rate.
The decision was underlined by Virag last week, when he said interest rates should not follow double-digit inflation.
“In such an uncertain environment, we must continue with more gradual but equally decisive interest rate hikes,” Virag said.
He reiterated that the central bank is preparing for a larger cycle of interest rate hikes, which will be extended to the second half of the year.
The forint has fallen more than 8% against the euro since Russia’s invasion of Ukraine, mostly after the Turkish pound.
Source: Capital
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