1 Having considered the latest economic and financial developments, today the Monetary Council of the National Bank of Hungary decided to reduce the central bank base rate by 25 basis points with effect from 25 October 2001. The financial market developments of past weeks, the clear and robust progress with the reduction in domestic inflation and the expected continuation of the disinflation process have made it possible to lower the Bank's major policy rate. Owing to the beneficial changes in the international economic environment, the required risk premium on forint-denominated investments has fallen gradually since the latest Council meeting.

2 The Council discussed the preliminary version of the inflation forecast in the Bank's Quarterly Report on Inflation, to be published on 13 November.

3 The Council discussed and approved the text of the Bank's Report on Financial Stability, to be published on 15 November.

4 The Council reviewed and approved the monetary programme for 2002.