Budapest - The Hungarian National Bank announced on Monday a cut in its base rate from 11 per cent to 10.5 per cent.

This is the second time in less than a month that the bank's monetary council has cut its benchmark rate by 50 basis points, the last being on November 24.

The central bank raised its base rate a whopping 3 percentage points to 11.5 percent on October 22 amid fears that speculators could cause a collapse of the national currency, the forint.

Shortly after that move, Hungary was offered an EUR 20 billion standby loan by the IMF, EU and the World Bank. With confidence in the economy considerably improved since then, the central bank has adopted a policy of cautiously trimming back its base rate. (dpa)