Hungary cuts base interest rate after 8-month break
BUDAPESTMar 25, 2015 - 12:00 am GMT+3
Mar 25, 2015 12:00 am
Hungary's central bank, the MNB, cut its main interest rate to a record low of 1.95 percent on Tuesday, the first reduction since a long-easing cycle ended last July. The MNB's rate-setting Monetary Council cut the benchmark rate by 15 basis points from 2.1 percent, a statement posted on the bank's website said. The move was widely expected by analysts due to Hungary's inflation rate, which has dipped under zero to record lows, mainly due to government-mandated cuts in household utility prices and low fuel prices. In February, the inflation rate rose to minus 1 percent, up from minus 1.4 the previous month but well below the MNB's medium-term target of 3 percent. Meanwhile, the national currency, the forint, has been strengthening to annual highs against the euro recently-a factor some analysts say can slow inflation as well as curb growth. Last year the MNB ended a two-year-long monetary easing cycle-aimed at stoking growth in an economy that suffered two recessions since 2010 - of monthly cuts that began in August 2012 when the rate was 7 percent.