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Hungary's forint, rates seen stable to end-june, Ecostat says

Hungary's currency and the benchmark interest rate are set to remain unchanged through the end of June, according to a monthly report published by Ecostat, the government's economic strategy research institute.

The benchmark two-week deposit rate, the European Union's second-highest behind Romania, probably will stay at 8%, while the forint rate may average 254.39 per euro in June, compared with 254.61 at 2:40 p.m. in Budapest, Ecostat said in the e-mailed report. Hungary's central bank raised its key rate five times from June to October to combat accelerating inflation. The consumer price index rose to 6.5% in December from 2.3% in April. Though it will rise further, government budget cuts will keep the forint from falling, Ecostat said. „No large wave of asset pullout has reached Hungary so far, and the measures toward cutting the budget deficit and the strict interest rate policy make that likelihood ever smaller,” the report said. The annual price index will peak near 8% in February through April, reaching 7.2% in June, according to Ecostat. (Bloomberg)