Hungary sees continued economic slowdown, inflation target being met: minutes report

By Richard Connell

New York, Jan. 9 - The Monetary Council of the Magyar Nemzeti Bank, foreseeing that inflation would meet its target level, cut its central bank base rate by 50 basis points to 10% at its Dec. 22 meeting, according to minutes released by the bank.

The council of the Hungarian central bank noted that inflation in November had fallen by 0.5% to 4.1%, due to a decline in commodity prices.

The council agreed that the continued slowdown in the Hungarian economy would lead to a continued fall in inflation, with the target level of 3% being met in the medium term.

While some council members argued in favor of a 1% cut in the interest rate in order to moderate tight monetary conditions as soon as possible, the majority voted for a 0.5% cut deeming that monetary policy steps should be taken more gradually.

The board has now cut the base rate by a total of 150 basis points since the extraordinary increase of 300 basis points on Oct. 22.

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