1 At its meeting on 9 September, the Monetary Council left the central bank base rate unchanged at 9.50%.

2 The Council discussed the Bank's strategy for maintaining foreign exchange reserves in 2003.

The widening of the intervention band and the introduction of inflation targeting in 2001 have provided an opportunity to reduce both the level and costs of maintaining international reserves. This serves the Government's objective to finance its debt maturing in 2002 by issuing forint-denominated securities. In line with the Bank's intentions, foreign exchange reserves have recently fallen from above €13 billion to near €10 billion.

After assessing the balance of potential risks, the Council judged the safe level of foreign exchange reserves to be around €9 billion in 2003.

3 Minister of Finance Csaba László attended the Council's meeting. Mr László discussed current economic issues with members of the Council.