Alapkamat

Alapkamat is the term used in Hungarian to denote a central bank's base rate, i.e., the key policy rate that guides monetary policy. It is the rate at which the central bank sets short-term interest rates and serves as a reference for lending and deposit rates throughout the financial system. In Hungary, the alapkamat is determined by the Magyar Nemzeti Bank's Monetary Policy Committee and is announced after policy meetings, together with projections for inflation and growth.

The alapkamat influences the economy through monetary transmission: a higher rate generally raises interbank rates, reduces borrowing and lending activity, and tends to lower inflation and slow the currency; a lower rate does the opposite. Banks use the alapkamat as a benchmark when pricing loans, mortgages, and deposits, and financial markets adjust expectations for future policy. The rate is commonly complemented by other instruments, such as liquidity operations, reserve requirements, and, in times of crisis, unconventional measures.

Effectiveness depends on credibility and transmission conditions; delays and imperfect pass-through can blunt the impact. The concept is central to inflation targeting and macroprudential policy, and adjustments to the alapkamat are watched closely by households, businesses, and financial markets. In Hungarian usage, discussions of the alapkamat appear in central-bank communications, economic analyses, and media coverage as a shorthand for the stance of monetary policy.