The Monetary Council reviewed recent economic and financial market developments. In accordance with its meeting schedule, the Council did not discuss changing the base rate; however, at its current meeting a decision was taken to widen the interest rate corridor. Based on its current decision, the Monetary Council increased the overnight and the one-week collateralised lending rate by 100 basis points to 6.40 percent.
The primary objective of the Magyar Nemzeti Bank (MNB) is to achieve and maintain price stability. With the escalation of the Russia-Ukraine war, risks in commodity and financial markets have risen. By widening the interest rate corridor, the Council has increased the room for manoeuvre in monetary policy, which is of crucial importance in the current situation. If necessary, the Bank stands ready to continue to respond quickly and flexibly to commodity and financial market risks arising from the rapidly changing environment by setting the one-week deposit rate.
In the current period of turbulence in financial markets, a key task for the MNB is to ensure market stability, in addition to meeting its primary objective of price stability. The MNB stands ready to intervene in order to ensure the stability of the financial system using all instruments of its monetary policy toolkit.
MAGYAR NEMZETI BANK
Monetary Council
Budapest, 8 March 2022