Hungary’s central bank will probably lower its benchmark interest rate to a record low as investors focus on the possibility of new President Gyorgy Matolcsy deploying unconventional measures to end a recession.
Hungary’s borrowing costs rose at a bond auction on speculation the central bank and the government may use unconventional methods to boost the economy amid a deepening European debt crisis. The forint weakened.
Gyorgy Matolcsy, the architect of Hungarian Prime Minister Viktor Orban’s self-styled unorthodox policies that helped push the economy into recession, vowed to focus on growth and fight inflation as central bank chief.
Hungary’s central bank cut its main interest rate for a seventh month to a record low as policy makers vowed further monetary easing to fight a recession at President Andras Simor’s final meeting on borrowing costs.
Gyorgy Matolcsy, Hungary’s new central bank president, moved to solidify his authority by stripping two vice presidents appointed by his predecessor of their areas of responsibility. The forint dropped.
Hungarian central bank president Andras Simor rejects Audit Office report findings that the Magyar Nemzeti Bank broke the law by supplying breakdown of commercial-bank data to IMF as part of 2008 bailout request. Simor speaks at parliamentary committee hearing today. * MNB sending commercial-bank data to IMF was legal and was aimed at making sure that bailout funds don’t leave country via foreign-owned banks, Simor says * Simor says MNB at the time failed to get written permission from commercial banks for sharing data with IMF though MNB last year received these and commercial banks had no complaints * NOTE: Simor’s six-year term ends March 3 * NOTE: Hungary Audit Says Central Bank Violated Rules, Raising Tension NSN MI63BR6TTDSC <GO> * NOTE: Hungary Police Probe Central Bank Over Data Handling Complaint NSN MIKISU6S972V <GO>
The forint weakened amid speculation Hungary’s central bank will further cut interest rates and as demand dropped for riskier assets on concern Europe’s debt crisis will escalate after inconclusive Italian elections.