Friday 25 September 2009

IMF Says Room Exists To Cut Rates For Hungary If Needed

IMF Says Room Exists To Cut Rates For Hungary If Needed

WASHINGTON -(Dow Jones)- The International Monetary Fund says room exists to reduce interest rates and spur the economy in Hungary, if necessary.

The IMF reviewed Hungary's economy as part of a loan program designed to help the European country weather the global financial crisis.

Hungary has gotten $12.12 billion in IMF disbursements.

Takatoshi Kato, the IMF's acting chairman, said policies to guide Hungary's economy and budget were "on track."

"Continued implementation of policies consistent with the program remains essential to strengthen macroeconomic stability and provide the basis for strong, sustainable growth over the medium term," he said. "Fiscal sustainability is being strengthened through structural spending reforms to the pension system, social transfers, and subsidies."

Kato said monetary and exchange-rate policy will continue to target inflation over the medium term, while authorities will remain prepared to act as needed to moderate risks to financial stability. "The combination of improved global financial conditions and increased confidence in fiscal sustainability has created room for cautious interest-rate cuts," he said.

-By Jeff Bater, Dow Jones Newswires; 202-862-9249;

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(END) Dow Jones Newswires

September 25, 2009 14:59 ET (18:59 GMT)

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