As the National Bank concludes its easing cycle by cutting the base interest rate to 1.35 per cent, a conservative columnist contends that the MNB has helped economic growth significantly, and, despite leftist fears, the Forint has not been weakened by the rapid sequence of rate cuts.
On Tuesday, the National Bank cut the base interest rate to an all-time low of 1.35 per cent. MNB chief György Matolcsy announced the end of the easing cycle and added that the National Bank intends to keep the current rate for a long time.
Left-wing fearmongers who criticized the MNB were wrong, writes Gergely Kiss in Napi Gazdaság, looking back on the MNB’s two-year easing cycle. The pro-government columnist recalls that the previous MNB leadership appointed by the former left-liberal government kept the base interest rate high and predicted that any significant cuts would severely weaken the Forint. Since 2013 under Matolcsy’s leadership, the base rate has been cut from 7 to 1.35 per cent, but the Forint has remained relatively stable, Kiss notes. Lower interest rates are a boost to lending and thus to the GDP. As inflation is low throughout the world and issuing banks including the Bank of Japan and the European Central Bank sustain their easing programs, the stability of the Forint is not in danger, Kiss concludes.