Inflation & Prices
Hungary Flags Pivot to Cutting EU’s Highest Interest Rates
- Central bank may lower top end of rate corridor next week
- It may then turn to the 18% key rate, deputy governor tells VG
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Hungary’s central bank unexpectedly signaled its first potential step toward cutting the European Union’s highest key interest rate, with policymakers pointing to an outlook of rapidly slowing inflation. The forint dropped against the euro.
Deputy Governor Barnabas Virag caught investors by surprise after months of pushing back against government pressure to lower the 18% key interest rate to aid the recession-hit economy. Central bankers had until now cited inflation of above 25% — also the highest in the EU — and a wobbly currency as key obstacles to looser policy.