Tuesday, May 28, 2013

Hungary cuts rate 10th time to 4.50%

    Hungary's central bank cut its base rate by 25 basis points to 4.50 percent, as widely expected, but made no further immediate comment in a decree from the bank's monetary council.
    The National Bank of Hungary has now cut its rate 10 times in a row. At its last meeting in April, the bank said it would consider further rate cuts if the outlook for inflation remained in line with the bank's target and sentiment in financial markets remained positive.
    Hungary's inflation rate fell to 1.7 percent in April from 2.2 percent in March, continuing the trend of declining inflation since a peak of 6.6 percent in September 2012.
    The central bank targets inflation of 3.0 percent and said last month inflation was likely to remain below this target this year and settle around the target in 2014.
    Hungary's Gross Domestic Product expanded by 0.7 percent in the first quarter of this year for annual contraction of 0.9 percent, less than the 2.7 percent shrinkage in the fourth quarter.
    Since starting its easing cycle in August last year, the central bank has cut rates by a total of 250 basis points with rates cut by 125 points this year.



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