Budapest - The Hungarian central bank lowered its base rate from 11.5 per cent to 11 per cent in a surprise move Monday.

Hungarian National Bank (MNB) head Andras Simor, speaking shortly after the decision, said members of the rate-setting monetary council had three choices: maintain the existing rate, or reduce it by 50, or by 100 basis points. The overwhelming majority supported the 50 b. p. lowering.

"A reduction of more than 50 basis points would have posed a significant risk to the financial system and the Hungarian economy under the present conditions," said Simor.

The MNB president declined to comment on a call from the leader of the centre-right opposition party Fidesz, Viktor Orban, to reduce the base rate to 6 per cent. "The Hungarian National Bank does not respond to political utterances," said Simor. (dpa)