Analysts said the reduction was in line with Hungary's European Union convergence efforts. It could also help maintain the country's current exchange rate regime. "It's aimed at boosting the competitiveness of the Hungarian banking sector, as in Western Europe
The National Bank of Hungary said it would cut its effective mandatory reserve rate to 7% from 11% as of 1 February. Analysts said that this would improve the competitiveness of the banking sector, boost growth and stimulate investment.