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Analysts see rates falling under 5% this year

The National Bank of Hungary could cut rates further, analysts told MTI after central bank rate-setters decided to reduce the base rate by 25bp to 5.25%, a historical low.

Péter Duronelly of Budapest Alapkezelő said the 25bp cut on Monday was in line with expectations, but markets have priced in a drop under 5% by the end of the summer. Inflationary pressure on the domestic market is practically non-existent, although changes to centrally-regulated prices could change this, he added.

Investment company Equilor said in a comment that the rate could fall under 5% this year. But rate-setters are likely to be cautious because of uncertainties surrounding the next government's economic policy as well as possible problems on global markets, it added. (MTI-Econews)