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Balog: Hungary has room for one or two more rate cuts

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The National Bank of Hungary (MNB) still has room for one or two more reductions in its record low base rate of 2.3% when it meets next week, Hungarian online business daily Napi.hu reported, quoting MNB Deputy Governor Ádám Balog.

The next meeting of the Monetary Council is taking place on July 22, and setting interest rates is on the agenda. The council has lowered the benchmark from the 7% peak of mid-2012 by gradual monthly steps, in order to encourage spending and achieve slightly higher inflation, which is now running at historic lows.

“At this moment I see room for one or two more reductions and that is by and large what is needed for the National Bank of Hungary to achieve its primary objective over the medium term, reaching and maintaining 3 percent inflation,” napi.hu said, quoting Balog.

The recently passed borrowers’ relief law for FX loans would have no direct impact on the rate policy over the next two months, Balog added.

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