Hungary's central bank projects easing of inflation, leaves bank rate unchanged at 8.5%

By Richard Connell

New York, Aug. 25 - The Monetary Council of Hungary's Magyar Nemzeti Bank left the central bank base rate unchanged at 8.5% based on its projection of subdued Hungarian economic growth combined with a slowdown in global activity leading to an easing of inflation by 2010, according to a press release announcing the results of its Aug. 25 meeting.

The council projects that inflation will continue to exceed its 3% target through 2009, then begin to pull back, as a result of domestic and foreign cost shocks.

The council also believes that the recent unfavorable news in global economic activity may contribute to a fall in international commodity and energy prices which will lead to disinflation in Hungary.

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