September 19, 2017 / 1:13 PM / a year ago

Hungary's central bank implements further monetary easing

BUDAPEST, Sept 19 (Reuters) - Hungary’s central bank is ready to loosen monetary conditions further via unconventional tools and has cut the cap on its 3-month deposit tool further by the end of the year, the Monetary Council said on Tuesday, after cutting its overnight deposit rate further into negative territory.

The bank cut its overnight deposit rate by 10 basis points to -0.15 percent. It left its base rate on hold at a record-low 0.9 percent as expected.

“The earlier loose monetary conditions, necessary to meet the inflation target in a sustainable manner, have, on the whole, become tighter in recent months. The repeated delay in the date of meeting the inflation target also warrants monetary easing,” the rate-setting panel said in a statement after its meeting.

“The stock of swap instruments will be increased in the coming period. The objective of the latter is to provide the loosening effect up to the longest possible section of the yield curve as soon as possible,” it added. (Reporting by Krisztina Than and Gergely Szakacs)

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