Forex: Hungary's Central Bank Cuts Key Rate To Record Low

(RTTNews) - Monday, Hungary's central bank lowered its key policy rate by a quarter point to a record low to boost the economy that is struggling to exit recession.

The Magyar Nemzeti Bank cut the rate by 25 basis points to 5.75% from 6.00%. The decision was in line with economists' expectations. Including the latest cut, the central bank has made a total reduction of 375 basis points since July last year.



With domestic demand still facing significant headwinds, any recovery will have to be driven by the export sector, Capital Economics said. With Eurozone growth already faltering, Hungary's the prospects for a strong rebound look slim, economists said. Eurozone remains the country's key export market.

Consumer price inflation accelerated to 6.4% in January from 5.6% in December, more than double the central bank's medium term target of 3%.