Hungary’s central bank has raised the interest rate by 25 basis points to 8.5 per cent from current 8.25 per cent. Rising inflation has prompted the central bank to raise interest rates to 3 year high.
Inflation had fallen to 6.6% in April 2008 compared to 9 per cent in March 2007. The central bank expected the inflation to be lower. The rising oil prices have also caused rise in price of many commodities and consumer durables.
The benchmark lending rate had been raised in the previous two meetings of the central bank as well.
Bulgarian and Romanian financial authorities are also fighting higher inflation. Other EU countries have lower inflation compared to other major world economies.
Indian government is having pressure from opposition as the inflation is growing at rapid pace in India as well. Rising oil and commodities prices have been cited as major reason for inflation rise.
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