HU: Increase in the policy rate after 10 years
In line with the market consensus and our expectation, the Monetary Council of the MNB increased the policy rate by 30bp, to 0.90%. Both the O/N deposit rate and the O/N lending rate remained unchanged, at -0.05% and 1.85%, respectively. As a result, the interest rate corridor became symmetric again. Both the councils statement and MPC members comments at press conference emphasized that they had launched a cycle of interest rate hikes to ensure price stability and to prevent inflation risks from having long-lasting effects and to anchor inflationary expectations. Policy makers promised monthly tightening steps in a data-driven manner. We continue to think that the peak of the new cycle of rate hikes could be at 1.35-1.50%, however this now seems to be reached at a quicker pace.