Hungary's central bank on Tuesday lowered its policy interest rate for the ninth successive time to a record low after the economy plunged further into recession in the fourth quarter and inflation pressures remained subdued. The decision was in line with economists' forecast.

The Monetary Council of the Magyar Nemzeti Bank lowered its two-week deposit rate by 25 basis points to 4.75 percent, following a similar reduction in March. The bank has lowered the rate every month since July, after holding it steady for seven successive months.

In the fourth quarter, the economy contracted at a faster rate pf 2.7 percent than the previous quarter's 1.7 percent, indicating that the ongoing recession has deepened. The downturn was driven mainly mainly by sharp declines in agricultural and industrial activity.

Hungary's annual inflation slowed for the third successive month to 2.2 percent in March from 2.8 percent in February. The deceleration mainly reflected slower growth in prices of electricity, gas and other fuels as well as clothing, footwear and consumer durable goods.

Core inflation, on a seasonally adjusted basis and adjusted for volatile items, was 3.4 percent during the month.

RTTNews