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Hungary hikes interest rates again

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Hungary hikes interest rates again

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Hungary’s central bank put up interest rates again on Tuesday, saying it has to do that to support the currency, the florint, and prevent inflation skyrocketing.

The benchmark rate was raised from 6.5 to 7.0 percent — the highest in the European Union.

The florint is down 12 percent against the euro since the summer because of the government’s unorthodox economic policies.

After spurning the International Monetary Fund last year to regain “economic sovereignty” Hungary recently held talks with the European Union and IMF on possibly getting up to 20 billion euros of aid.

The talks were put on hold last week because Brussels is worried about political interference with the central bank’s independence.

Bank Governor Andras Simor has warned a new bill due before parliament amounted to a government takeover at the bank.