Hungary sees rate cut possible if euro plan gains traction

Hungary could deliver another interest rate cut this year if external market conditions remain favourable and the government presents a credible euro adoption plan. Deputy governor Zoltan Kurali noted that clearer fiscal policy would improve risk sentiment.

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FILE PHOTO: A view of the entrance to the National Bank of Hungary building in Budapest,Hungary February 9, 2016. REUTERS/Laszlo Balogh/File Photo

Hungary's central bank kept its base rate steady at 5.5% on Tuesday while leaving the door open for a rate cut by late 2026. The move follows a lowering of the inflation target to 2.5% as part of efforts to adopt the EUR/HUF currency framework. Investors are watching fiscal plans as the government targets euro adoption by 2032.

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