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Hungary Central Bank Holds Rate Steady

Hungary's central bank kept its benchmark interest rates unchanged, as widely expected, on Tuesday.

The Monetary Council of the Magyar Nemzeti Bank decided to hold the base rate unchanged at 0.90 percent.

The previous change in the rate was a 15 basis points reduction in May 2016.

The overnight central bank deposit rate was held at -0.05 percent after cutting it by 10 basis points in March. The one-week collateralized loan rate was retained at 0.90 percent.

Inflation eased for a third straight month in August, down to 3.1 percent. This was within the central bank's target range of 2-4 percent.

"With external headwinds mounting, we expect the MNB to shift towards a more dovish stance," Capital Economics economist Liam Peach said. "We think that the central bank will now leave monetary conditions unchanged until the middle of next year."

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