The Monetary Council of Hungary's central bank MNB decided to cut its base rate by 25 basis points to 12.25 %, contrary to market expectations of no change. MNB last changed rates on 28 November 2003, when it raised the base rate by 300 basis points.
As a result of improving external and internal economic developments, the conditions for meeting the end-2005 inflation target of 4% have improved, which made a rate cut possible, the Monetary Council said.
