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Matolcsy sees room for further rate cuts

National Economy Minister György Matolcsy, considered one of the candidates to become the next governor of the National Bank of Hungary (MNB), said on Thursday that the bank could theoretically reduce its interest costs through further rate cuts if the interest rate on foreign-currency reserves does not change to a degree that would jeopardize price stability. Answering a question in parliament, Matolcsy noted that interest costs grew considerably as a result of the increase foreign-currency reserve requirements and the parallel rise in the foreign currency-forint interest differential following the onset of the global economic and financial crisis in 2008. Matolcsy noted that the interest differential exercises a considerable influence on Hungary's general macroeconomic situation and appraisal abroad.