Hungary’s central bank may cut the European Union’s highest benchmark interest rate in early 2013 if the nation’s risk assessment and inflation outlook improve “significantly,” Governor Andras Simor said.
Hungary’s forint dropped the most in five months on concern the next government may replace the central bank president, while speculation the Greek debt crisis may prove contagious hurt demand for emerging-market assets.
Hungary’s chances of obtaining a bailout receded after lawmakers approved new central bank regulations Dec. 30 that prompted the International Monetary Fund and the European Union to break off talks last month.
Hungarian central bank President Andras Simor pledged to stay in office until his term expires in three years and said he wanted to cooperate with a new government led by the Fidesz party, which has criticized him and told him to quit.
Hungarian policy makers cut the main interest rate for a sixth month, helping to ease investor uncertainty over a change in the central bank’s leadership with a warning on the use of new monetary-policy tools.
Hungary’s government is disputing objections from the European Central Bank over a plan to cut the salary of Magyar Nemzeti Bank President Andras Simor , who earns more than twice as much as Ben S. Bernanke .