The Monetary Council of Hungary’s central bank (NBH) left the base rate on hold at 9.50 percent at a rate-setting meeting on Monday.
The decision to leave the key rate unchanged was unanimous, NBH Governor Andras Simor told a press conference.
The Hungarian economy’s outlook for growth has deteriorated due to the global financial and economic crisis, banks’ restrained lending policies as well as planned austerity measures announced by the prime minister, Simor said. He added that the austerity measures, which involve spending cuts, may induce growth in the long-term.
Although the exact size of planned tax changes is not yet known, the Monetary Council believes that the government’s measures may divert inflation from the 3 percent target for a shorter or longer period of time, he said.