Hungary real interest rate level should be watched -government

BUDAPEST, March 6 Thu Mar 6, 2014 5:06am EST

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BUDAPEST, March 6 (Reuters) - Hungarian real interest rates should not sink to levels that no longer support the economic policies of the government, Economy Ministry State Secretary Gabor Orban said on Thursday.

The central bank has lowered its base rate to a record low of 2.7 percent from an August 2012 peak of 7 percent in steady monthly cuts and on Wednesday the bank said it would decide in March whether further easing was possible.

"There is pressure on real interest rates across the world and we cannot separate ourselves from this," Orban told a conference on the forint organised by business news website portfolio.hu.

"There is a level of real interest rates, which no longer supports the government's economic policies," he said. "The Monetary Council is also aware of this and I am certain that this (factor) is part of their consideration."

Two of the bank's nine rate-setters voted last month to halt rate cuts at 2.85 percent. (Reporting by Gergely Szakacs and Krisztina Than)

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