Hungary chooses to leave central bank base rate unchanged at 9½%

By Richard Connell

New York, May 26 - The Monetary Council of the Magyar Nemzeti Bank left its central bank base rate at 9½% at its meeting on Monday, according to a news release issued by the bank.

The council of the Hungarian central bank noted that the domestic economy has continued to be adversely effected by the downturn in world trade, reflected primarily in reduced exports.

The council forecast that the slowdown in Hungary would be deeper than the European average, and the council does not expect an economic recovery until 2011.

The council did sound one optimistic note, pointing out the improved sentiment toward Eastern Europe and Hungary, although noting that it has yet to be reflected in higher foreign demand.

Seeing inflation falling below the target level in the medium term due to the reduced domestic demand, the council left the interest rate unchanged at 9½%.

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