Hungary will probably cut its key interest rate by a full percentage point, taking a step closer to ending an emergency monetary regime as policymakers try to combat the country’s longest recession since at least 1995.
The central bank will cut its overnight interest rate to 14% on Tuesday, according to all 12 analysts in a Bloomberg survey. The move will bring the instrument, which was made the key rate in October to stem a plunge in the forint, one step away from the benchmark rate, which is expected to be kept at 13%.
Hungary’s economy has contracted for four consecutive quarters as consumers and companies struggle with the European Union’s fastest inflation and highest borrowing costs, which have depressed consumption and production.
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