Hungary's Central Bank slashes key rate by 25 bps to 6.75%
2012-08-29 11:42:52
Hungary's central bank on Tuesday unexpectedly reduced its benchmark interest rate by 25 basis points, after keeping it unchanged for seven months in a row.
The Nemzeti Bank lowered the policy rate to 6.75 percent from 7 percent, while economists expected the bank to leave the rate unchanged.
The central bank had kept its interest rates unchanged for seven successive months as the country's bailout negotiations with the International Monetary Fund and the European Union stalled, and inflationary pressures remained high.
The economy slipped into recession in the second quarter, with nearly half of its industries recording stagnation. Gross domestic product decreased 1.2 percent year-on-year, after falling 0.7 percent in the first quarter.
Hungary's annual inflation accelerated to 5.8 percent in July from 5.6 percent in June, hitting the highest level in five months.