Central Bank of Hungary yesterday lowered the interest rate to a record. “The fundamental situation has not improved. Last month in the Hungarian economy did not become less risk. Therefore, we omit the rate of fine pitch - not 50, and 25 basis points to 6%. Continuation of change will depend on the dynamics of risk,” - said the press conference, Governor of the National Bank of Hungary Andras Shimor.

Since July 2009 Hungary lowered the discount rate by 3,5 percentage points - up to 6%. This low level since the fall of the communist system was recorded only once - in September 2005 to May 2006 then lowered the interest rate the government gasilo national currency - the forint, which grew from the influx of foreign investment associated with the country”s entry into the European Union 2004

Today, Hungary is facing a far more serious problem - the decline in consumer spending caused by the reduction of the economy. According to government forecasts, the lack of demand will be up to 2012 to keep inflation below the target level (3%), which gives a wide range of games for the interest rate.

“In Hungary, there are very aggressive cycle of interest rate changes. What makes the central bank can be regarded as an excellent balance between economic demands and requirements of investors who want to receive bonuses in connection with the risks greatly increased after the country was mired in debt “- argues strategist in London bank BNP Paribas Bartos Pawlowski.

As written “EI”, in October 2008, Hungary was second after Iceland”s largest victim of the global crisis. Its export-oriented economy contracted by 7.5%, and avoid default of the government was forced to borrow from other states $ 30 billion state debt had ballooned to 79.8% of GDP - twice that of neighboring Romania and Slovakia. According to experts, it limited the ability to lower the discount rate, as in connection with the increased risk of Hungary”s creditors demanded high interest on loans.

Under pressure from the International Monetary Fund (IMF) and other investors Hungary drastically cut government spending, reducing the budget deficit to 3,9% of GDP. In the second half of 2009, when in Europe there were signs of recovery, reduced consumption of Hungary”s economy has continued to fall.

However, encouraged by the positive global trends, investors eased pressure on the government of that country, giving scope for lowering interest rates, with which the authorities plan to slow the decline. According to forecasts the country”s Finance Minister Peter Osko, in 2010 Hungary”s GDP to decline by 0.6% after falling 6.7% in 2009

Decision

central bank gave the ground for populism. Center-right opposition party Fidesz, which many analysts are predicting victory in parliamentary elections in April 2010, accusing the aceeuthorities that they were due to personal investment interests lingered with lowering interest rates, it gubilo economy.

“Time has justified the position of Fidesz. More than a year ago we asked the National Bank sharply lower discount rate to 6%. Then the Socialist Party and the government criticized Fidesz. As a result, over the last year the economy sank into a profound crisis, with thousands of people lost their jobs,” — said in a press release, the head of the electoral headquarters of Fidesz Peter Siyarto.

FAS developed a methodology for calculating the share of retail networks
Asian markets decline during today”s trading on the background of falling prices in commodities markets, as well as the strengthening of the dollar
Technical Analysis of American Depository Receipts Vale
The technical analysis of shares of Intel
NBU has not yet approved the decision to eliminate Hypobank
ASTP: The capitalization of the 10 largest agribusiness companies in Ukraine has increased over the last year tripled
Analytics - the outcome of the day

Energy, World Stock Market, Currency, Weather …

Forex on the European session
Today”s “hysterical” quotes Russian market can quickly redeem