2017.03.2808:18:00UTC+00Hungary Holds Key Rate Unchanged For 10th Straight Month

Hungary's central bank held its key interest rate unchanged at a record low for a tenth month running on Tuesday.

The Monetary Council of the Magyar Nemzeti Bank kept the base rate steady at 0.90 percent, in line with economists' expectations.

The bank had cut the key rate by 15 basis points in March last year, which was the first reduction in eight months. Similar size cuts were repeated in April and May last year.

The overnight deposit rate, which was cut to negative a year ago, was held steady at -0.05 percent.

The overnight collateralized loan rate was also left unchanged at 0.90 percent. The rate was last trimmed in November when it was cut by 15 basis points.

The one-week lending rate was also kept at 0.90 percent. The rate was previously reduced by 10 basis points in November.

The country's inflation hit a four-year high of 2.9 percent in February. Core inflation was 1.8 percent.

Following its policy session late February, policymakers said inflation climb further in coming months due to base effects, which would fade going forward. Inflation is expected to reach 3 percent target in the first half of 2018.

The bank expects economic growth of over 3 percent both this year and next. Annual growth eased to 1.6 percent from 2.2 percent in the fourth quarter of 2016, while the quarterly growth rate improved slightly to 0.4 percent from 0.3 percent.