Summary Move was expected by analysts due to Hungary's inflation rate which dipped under zero to record lows
BUDAPEST (AFP) - Hungary s central bank MNB cut its main interest rate to a record low of 1.95 percent on Tuesday, the first reduction since a long easing cycle ended last July.
The MNB s rate-setting Monetary Council cut the benchmark rate by 15 basis points from 2.10 percent, a statement posted on the bank s website said.
The move was widely expected by analysts due to Hungary s inflation rate which has dipped under zero to record lows, mainly due to government-mandated cuts in household utility prices and low fuel prices.
In February the inflation rate rose to minus 1.0 percent, up from minus 1.4 the previous month but well below the MNB s medium-term target of 3.0 percent.
The national currency the forint meanwhile has been strengthening to annual highs against the euro recently, a factor some analysts say can slow inflation as well as curb growth.
Last year the MNB ended a two-year-long monetary easing cycle -- aimed at stoking growth in an economy that suffered two recessions since 2010 -- of monthly cuts that began in August 2012 when the rate was 7.0 percent.
The MNB said last July that the rate would be kept on hold at 2.1 percent as long as the bank s target of 3.0 percent was not threatened.
