Berlin/Budapest - The Hungarian central bank left interest rates on hold at 8.5 per cent Monday as a strong national currency helps to bear down on inflationary pressures in the country.

The decision by the Budapest-based national bank to leave its key rate unchanged for the second month in a row was in line with analysts' forecasts.

But announcing the move, the bank's monetary council warned that "Hungarian economic growth has remained subdued and inflation has been falling at a slow rate over recently."

It went on to express concerns that inflation expectations potentially are becoming stuck at a high level with the global rises in food, commodity and energy prices adding to the upside risks to inflation.

"Data received over the past two months reveal that inflationary pressures have increased due to rising oil prices and diminished due to the strengthening of the forint exchange rate," it said.

Monday's announcement by the bank also came in the wake of a series of rate hikes by Hungary's monetary authorities, which have pushed up borrowing costs in the new European Union state by 100 basis points since September last year.

However, more recently data showed the country's inflation rate dropping from an annual 6.9 per cent in May to 6.7 per cent in June. (dpa)