HU: MNB cut the policy rate to 6.50%

Following the Augusts pause, the Monetary Council reduced the policy rate by 25 basis points, to 6.50% today. Both the O/N deposit and O/N lending rates were also cut by 25 bp to 5.50% and 7.50%, respectively. The decision was in line with our expectation and the market consensus. The September rate reductions carried out by major central banks coupled with the stable forint and lower inflation of August created a room for the MNB to restart the monetary easing.

As usual, the statement of the monetary council will be released at 3 p.m. In addition, Deputy Governor Virag will also hold a press conference at 3 p.m. on the background of todays decision. The MNBs new GDP and inflation projections will also available. We will issue another Instant Comment later, on the details.