Hungary reduces interest rates

Hungarian interest rates have been lowered by 50 basis points in order to protect the currency, and at 11 percent, the Hungarian central bank announced that the measure has been made in order to satisfy the recent plan that has been brought into action thanks to the International Monetary Fund (IMF).

It is hoped that the pressures on the economy will be brought back into line and the planned budgetary measures are hoped to reduce the risk of having to finance the external debt and plunge the economy into even greater doom and gloom.

It is a successful measure for the government who was able to secure the move after having to persuade the opposition party that the IMF bailout was essential in protecting the economy.

In a joint attempt the European Union and World Bank offered a combined 20 billion euros to the Hungarian government.

Thus far, the Hungarian economy has suffered in recent months as it has been battling with inflation which has been struggling to reach the 3 percent target rate.

In the currency markets, the Hungarian forint rose 3 percent against the euro and it increased by 5.4 percent against the US dollar after the central bank reduced the reserve ratio by 3 percent to 2 percent in order to increase liquidity.

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