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Hungarian Deflation Seen Prevailing Over Forint on Rates

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Hungarian deflation has analysts predicting the central bank will cut interest rates even with the forint close to the weakest in three years.

With consumer prices falling in six of the last eight months, Hungary’s central bank reduced its 2014 inflation forecast to 0.9 percent from 2.5 percent in September. The forint is the fourth-worst performing emerging-market currency this year, weakening 2.3 percent in the past seven days alone amid contagion concern from Russia’s ruble crisis.