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Hungary c.bank cuts rates by 15 bps to new low of 2.85 pct
January 21, 2014 / 1:11 PM / 4 years ago

Hungary c.bank cuts rates by 15 bps to new low of 2.85 pct

BUDAPEST, Jan 21 (Reuters) - Hungary’s central bank cut interest rates by 15 basis points to a new low of 2.85 percent on Tuesday, slightly more than most analysts expected, shrugging off a weakening forint as domestic debt auctions remain well bid and default risk is near four-year-lows.

The Monetary Council, appointed in its entirety under Prime Minister Viktor Orban’s government, lowered rates below its own previously flagged 3 percent bottom, taking advantage of a benign market reaction to a cut in U.S. monetary stimulus.

Tuesday’s cut was slightly larger than most analysts had expected in a Jan. 13-16 Reuters poll. Sixteen of 20 analysts forecast a 10 basis-point cut, while four had predicted another 20 basis-point reduction. None of the analysts tipped a 15 basis-point cut.

The bank has now lowered the cost of borrowing by a total of 4.15 percentage points since August 2012 to help the economy. (Reporting by Krisztina Than; Editing by Hugh Lawson)

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