2018.09.1808:54:00UTC+00Hungary Central Bank Holds Key Rate Steady As Expected

Hungary's central bank kept its benchmark interest rates steady on Tuesday, as expected.

The Monetary Council of the Magyar Nemzeti Bank decided to hold the base rate unchanged at 0.90 percent.

The previous change in the rate was a 15 basis points reduction in May 2016.

The overnight central bank deposit rate was kept at -0.15 percent, after it was trimmed by 10 basis points last September. The rate was slashed to negative in 2016.

The one-week collateralized loan rate was left unchanged at 0.90 percent. Inflation at 3.4 percent in August was above the bank's target of 3 percent. Wage growth remains strong.

Capital Economics economist Liam Carson expects the bank to announce plans to gradually withdraw its stimulus measures in the post-meeting press statement due later on Tuesday.

The economist also expects the first rate hike to come in the first half of next year.