By CentralBankNews.info
Hungary’s central bank, which earlier today cut its base rate for the 21st time in a row, said the “slight improvement in risk perceptions associated with the economy provided room for a cautions reduction in interest rates.”
The National Bank of Hungary, which cut its base rate by a further 10 basis points to 2.50 percent, repeated its guidance from March that the base rate had now approached a level that ensures price stability in the medium term and support for the economy.
But it added today that “over the coming period, changes in the domestic and international environment might influence this picture,” signaling that the bank now considers rates to be broadly neutral and future policy changes would depend on incoming data.
The central bank’s council said economic growth is likely to continue and while the pace of economic activity is strengthening, output remains below potential and is likely to return to close to that level during the next year.
“Inflationary pressures in the economy are likely to remain moderate over the medium term and inflation is likely to move into line with the medium-term inflation target from 2015,” the bank said.
(more to come)