Hungary elects to lower central bank base rate by 50 bps to 8%

By Richard Connell

New York, Aug. 24 - The Monetary Council of the Magyar Nemzeti Bank cut its central bank base rate by 50 basis points to 8% at its meeting on Monday, according to a news release issued by the bank.

The council of the Hungarian central bank assessed that although the global economic environment has stabilized in recent months, both the global and local economies are unlikely to recover rapidly in the near term.

The council forecast that inflation is likely to rise above the medium-term target temporarily but should move well below it in 2010, when the council sees economic growth in Hungary resuming.

With an eye on loosening tightening credit conditions, the council lowered the interest rate by 50 bps and hinted that further cuts were likely.

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