This Tuesday, the National Bank of Hungary (MNB) raised its base rate by one percentage point, bringing the base rate, which is again the benchmark rate, from 9.75% to 10.75%. The last time the interest rate was this high was in late 2008, during the height of the global financial crisis, when it was cut to 10.5% from 11% in December.
The decision has not boosted the Hungarian currency the forint (HUF), with the euro appreciating from HUF 400 forints in the morning to HUF 401.7 in a matter of minutes – though this is not a particularly serious weakening, with the exchange rate hovering in the HUF 398-402 range during the day.
The new 1 percentage point increase in the Fed funds rate suggests that the central bank is not in any way narrowing the gap between European and US interest rates, but is actually widening the interest rate differential, the popular news site telex.hu reports.
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