The government will extend the deposit interest rate cap

RockedBuzz
By RockedBuzz 2 Min Read

Pursuant to the Government’s previous decision, from November 22, 2022, certain institutional investors, funds, housing savings banks, insurance companies, investment funds and retail customers who deposit at least HUF 20 million cannot receive a higher interest rate than the 3 at the rate of the average auction yield of a monthly Discount Treasury bill.

According to the ministry, some institutional investors took advantage of the situation and obtained an income that is not justified in the current situation, because they realized the central bank’s interest rate of up to 18 percent risk-free.

“In order to further avoid disproportionate enrichment, the Government extends this deadline until June 30, 2023,

and in order to protect the economy, at the same time prohibits the unrestricted transfer of central bank discount bonds” – they write.

Our interpretation of this can be read here:

According to the announcement, the measure prevents unfair profit-making either through the deposit tenders or through the discount bonds newly introduced by the central bank. “All this contributes to the smooth operation of lending and government securities distribution, and to the redirection of funds into the economy,” the announcement states.

Cover image: Getty Images

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