Hungary’s central bank lowered its key interest rates by another 15 basis points to a record low as expected by economists.
The Monetary Council of the Magyar Nemzeti Bank reduced the base rate to 1.8 percent from 1.95 percent. This was the second consecutive reduction in rates.
The new rate will take effect on April 22. It had lowered the rate by 15 basis points in March.
Consumer prices have been falling since September 2014. In March, consumer prices fell 0.6 percent from last year. In April last year, prices decreased for the first time since 1968.
Inflation is likely to remain in negative territory over the course of this year, William Jackson, a senior emerging markets economist at Capital Economics said.
Given this, as well as possible concerns about the recent strength of the forint against the euro, the economist expects the central bank to continue to ease monetary conditions gradually.
The material has been provided by InstaForex Company – www.instaforex.com