Hungary's central bank maintained its easing cycle in January, announcing a slightly bigger-than-expected reduction in the key interest rate, which took it to a new record low.

The Monetary Council of the Magyar Nemzeti Bank on Tuesday decided to cut the base rate by 15 basis points to 2.85 percent. Economists had expected to bank to adopt a more modest reduction of 10 basis points.

The central bank has been steadily cutting interest rates every month since August 2012. The base rate has been reduced by 415 basis points thus far in the easing cycle.

A rate cut was widely expected this month, given the remarks made by Hungarian policymakers in recent weeks.

In January, the bank has slightly slowed the pace of easing with a 15 basis points cut versus the 20 basis points reductions in each of the past five months.

Hungary's inflation hit a 43-year low of 0.4 percent in December. The country's jobless rate is near its lowest level in five years and wage growth has weakened.

The economy expanded for the second quarter in a row, in the three months to September. Gross domestic product rose 1.8 percent year-on-year, following 0.5 percent expansion in the second quarter.

RTTNews