The Magyar Nemzeti Bank maintained its benchmark base rate steady at 6.00% as inflation drifted down towards its target. The Bank said: "Hungary has also been affected by the decline in global risk appetite due to the euro-area sovereign debt crisis and uncertainty surrounding the outlook for growth in developed countries. The Monetary Council has decided to leave interest rates unchanged in light of the above considerations. Over the period ahead, the Council's interest rate decisions may be influenced by the success of measures to solve the euro-area debt crisis, in addition to expected developments in domestic inflation." Hungary's central bank also made a separate announcement affirming its 3% inflation target, as part of a triennial review.
The Magyar Nemzeti Bank also held the interest rate at 6.00% during its July meeting, after raising it 25 basis points in January this year. Hungary reported annual inflation of 3.1% in July, slower than the previous 3.5% in June, 3.9% in May, and 4.7% in April. Hungary's Central Bank has a medium term inflation target of 3%, while the Bank expects inflation to average 3.9% this year. The Hungarian economy grew at an annual rate of 2.4% in the march quarter, faster than the 1.9% growth recorded in the December quarter last year. The Hungarian forint (HUF) has gained about 10% against the US dollar this year, the HUFUSD exchange rate last traded around 188.5