Hungary central bank cuts key interest rate to 3%

Budapest (AFP) - Hungary's central bank (MNB) cut its main interest rate Tuesday to a new record low level of 3.0 percent from 3.2 percent, in line with analyst expectations.

The cut, announced on the bank's website, was the 17th in a row in an easing policy begun in August 2012 when the rate was 7.0 percent.

The MNB was scheduled to explain its decision in a statement at 1400 GMT.

The central bank has said in recent months that Hungary's low inflation and growth outlook, as well as the continuing favourable global market sentiment, argued in favour of chopping the base rate to historically low levels.

Hungary -- not a member of the eurozone -- has recorded three straight quarters of growth this year, after enduring its second recession in four years in 2012.

Overall growth for 2013 was forecast at just 1.0 percent however, followed by 2.0 percent in 2014.

Twelve-month inflation, one of the highest in the EU in 2012, has meanwhile dropped to a 40-year low of 0.9 percent since October.

After Tuesday's announcement, the national currency -- the forint -- remained stable, trading at 299.16 to the euro compared to 299.07 just before.