Monetary easing cycle continues, NBH decided at today´s meeting. The motivation to support economic growth and inflation below target encouraged the NBH to continue in its policy to cut rates by 20 bps again, to the new all time low of 3.6%.
Consumer price index dropped substantially in Hungary, from 1.8% YoY in July to 1.3% YoY in August and, in addition, the government approved the next round of public utility cost reduction from 1 November that may push consumer price index below 1% YoY at the year´s end. However, the NBH abandoned its singledimensional inflation targeting system in favor of a new, multidimensional decision matrix, focusing also on economic growth, labor market and stability aspects. That is why the monetary easing cycle continues. On its last meeting, the NBH also cut rates by 20 basis points.