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Monetary council cuts base rate for 10th time in twelvemonth

The monetary council of the National Bank of Hungary cut the benchmark interest rate by 50 percentage points from 8.25% to 7.75% today, the change is effective as of March 30. Over the past 12 months, the base rate was continuously lowered in a series of 10 rate cuts, the last of which took place today. The decision was motivated by favorable inflation trends in recent months, with disinflation setting in in the service sector in February, MNB announced at the press conference that followed the meeting. The national bank?s press release noted the striking fact that confidence in the Hungarian economy did not improve in the long term in spite of the improving inflation figures, as shown by the long-term yield margins. The monetary council is expecting Hungary?s economic growth to slow down in 2005 and 2006.