Sober government communication on Ukraine, orderly MNB rate hike today

HUNGARY - In Brief 24 Feb 2022 by Istvan Racz
The MNB carried out the expected 30 bps sterilisation rate hike today, raising the 1-week deposit rate to 4.6% at this week's deposit tender. The MNB did not react to the forint's significant weakening, caused by the outbreak of the war in Ukraine and the fall of EURUSD, during the day.The government sent out the following message by email to domestic citizens, using the address list built up earlier through registrations for Covid vaccination:'Dear Compatriot!Unfortunately, the worst scenario materialised in Hungary's immediate neighbourhood: a war that could not be prevented even by the biggest countries' diplomatic efforts.In this situation, most important is to guarantee the security of Hungarian people. We are worried about Ukraine, we stand by Ukraine's territorial integrity, but war is no solution. It is our fundamental interest to keep Hungary outside the war conflict. Therefore, we regard irresponsible and do not support the opposition view that Hungary should send soldiers and weapons to Ukraine. Neither will we support proposals which would put at risk Hungary's supply with gas and low energy costs for households.As a member of EU and NATO, Hungary supports joint efforts to restore peace. The Hungarian Defence Force is prepared for the tasks of border protection and humanitarian aid, and our embassy will help Hungarians in Ukraine in every respect.Sincerely,The Government's Information Centre'While we think this is sober talk, which could be read together with what we wrote on the government's balancing attitude in yesterday's report, we need to add that we do not know of any opposition initiative to send military personnel or weaponry to Ukraine. However, o...

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