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Central bank rate rise provides stability till IMF-EU agreement reached, says governor

A decision by the National Bank of Hungary (MNB) on Tuesday to raise the central bank’s key rate by 50bp will stabilise financial markets until Hungary reaches an agreement with the International Monetary Fund and the European Union, MNB governor Andras Simor said at a conference on Thursday.

Hungary is in dire need of the IMF-EU agreement, Mr Simor said at the conference organised by economic research institute GKI. There can be no reduction in state debt without investor confidence, he added.

Hungary’s government said in mid-November that it is seeking financial assistance from the IMF and EU as a precautionary measure.