NBH Members Maintain View That Cautious and Gradual Approach Required

The NBH have released the minutes from their most recent rate-setting meeting. The highlights are as follows:

• Decision makers agreed that by closing the gap between the interest rate on the one-day quick deposit tenders and the base rate, monetary policy would enter a new phase. In this new phase, monetary policy would still focus on achieving the inflation target and maintaining financial market stability.
• Several members pointed out that the new phase would provide an opportunity to further simplify the monetary policy toolkit, where continuity would play an important role. Decision makers were of the view that the evolution of disinflation and Hungary’s risk assessment should be monitored closely.
• Members were of the view that it was still necessary to maintain a cautious and gradual approach.
• If the improvement in risk perceptions persisted, the Bank would continue to close the gap between the interest rate conditions of one-day tenders and the base rate.

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