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Hungary's central bank holds rates at 8%

Hungary's central bank on Monday held the base interest rate at 8% for the fifth month in a row, in line with analyst expectations.

The bank raised the base rate by 200 basis points between June and October 2006, before taking a break from the cycle of hikes in the face of rising inflation pressures. Analysts now feel that the rate could come down by at least one per cent in the second half of the year. Inflation rocketed as a consequence of a economic reforms instituted last year by the government as it attempts to bring its budget deficit under control. March saw a CPI figure of 9%, but analysts say that the rising inflationary trend has now peaked and pressures should begin to ease. (