Hungary cuts interest rate again

CNC reporting from Budapest
Added On April 24, 2013

Hungary's central bank has cut the benchmark two-week deposit rate by a quarter a percent to 4.75 percent in Budapest.

It is the ninth straight cut in as many months.

The new governor of Hungary's National Bank believes the cuts will help the economy overcome its second recession in four years.

The Hungarian currency forint  has slowly climbed up from a 14-month low against the euro.

Inflation is at a nearly unprecedented low over the past 40 years.

Investors predict that the benchmark rate will drop to 4 percent or lower over the next six months.

According to a statement issued by the bank, the low inflation rate is due to the low demand and declines in regulated prices.

It expects inflation to remain below the 3 percent target this year.

As long as the medium-term inflation outlook remains within the 3 percent target and money market flows continue to be favorable, the monetary council will be able to further reduce its benchmark rate.