Hungary raises interest rates due to depreciation of forint

The Hungarian central bank raised its policy rate after the currency approached an all-time low The bank raised its one-week deposit rate by 30 basis points to 6.75 percent. This was the highest effective interest rate in Europe. Economists who participated in a Bloomberg survey had also forecast a 30 basis point increase. The deputy governor of the Hungarian central bank, Barnabas Virag, said the central bank would raise interest rates every month and that the interest rate would rise to 7.05 percent by the end of June. Virag said in an interview on Wednesday that they needed to continue raising interest rates gradually but decisively due to the uncertainty. The forint has fallen 8 percent against the euro since February, becoming the second-highest-depreciating emerging market currency after the Turkish lira.