Hungary’s central bank should keep its benchmark interest rate on hold and adopt a tightening bias to avert any negative impacts from global market uncertainties, the International Monetary Fund (IMF) said late on Friday.
In its latest country report based on meetings with Hungarian officials in March and April, the IMF said Hungary’s interest rate differentials have reached record lows and further rate cuts could be risky to the country’s bond markets.
Hungary’s central bank (NBH) has been cutting its base rate continuously since August 2012, to a record low of 2.4 percent, and has left the door open to further easing.
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