Hungary cuts cost of borrowing again

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Hungary cuts cost of borrowing again

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Hungary’s central bank has cut its main interest rate to a record low of 4.25 percent. It was the 11th straight monthly reduction – each time by a 0.25 percent.

Policy makers have said they want to take advantage of the fact that inflation is near its lowest in almost 39 years to cut rates and boost growth

Hungary reported the economy expanded by 0.7 percent in the first three months of the year lifting the country out of a recession, but business surveys indicate the improvement may not last.

The central bank has said it is seeking a “neutral” interest rate level, that is when financial markets view it as neither tight nor accommodating, but many economists do not see it cutting below 4.0 percent.