Policy makers keep base rate, O/N deposit rate on hold

The Monetary Council of the National Bank of Hungary (NBH) decided to keep the central bank's base rate at 0.90 percent and the O/N deposit rate at -0.05 percent at a monthly policy meeting on Tuesday. The decision was in line with expectations. In a statement released after the meeting, the council again noted the upside risk to inflation of strong domestic demand, contrasted with the downside risk of weakening external activity, but said "downside risks have strengthened" with regard to persistent inflation trends. The council repeated that it "applies a cautious approach" to monetary policy decisions, and that future developments in the outlook for inflation would be "a decisive factor in the necessity of further measures".