Hungary Cuts Key Rate and Pledges Caution With Eye on Forint

Hungary’s central bank cut its key interest rate for the first time in almost a year and a half but pledged to stay cautious as policymakers look to protect the stability of the local currency.

The National Bank of Hungary lowered its benchmark interest rate by a quarter-point to 6.25% on Tuesday, in line with the majority of views in a Bloomberg survey. The decision was made after inflation slowed to 2.1% in January, below the central bank’s 3% target for the first time in five years.