Hungary's central bank pauses rate cuts amid rising inflation risks

BUDAPEST, Sept 22 (Reuters) - Hungary's central bank left its base rate steady at 5.5% on Tuesday HUINT=ECI, as expected, pausing a string of rate cuts amid increased global risks and a planned lowering of its inflation goal.

The decision was in line with the median forecast in a Reuters poll last week. One economist projected a 25 basis-point cut. At 1203 GMT, the forint traded at 361.85 versus the euro, a touch weaker than 361.7 just before the rate announcement.

The National Bank of Hungary last month delivered its third successive quarter-point rate cut, as expected, to 5.5%, as price growth remained well below its 3% target.

However, on September 10 Governor Mihaly Varga struck a cautious tone, saying that despite steep falls in inflation, which stood at an annual 1.3% in August, a disciplined monetary policy was needed amid serious global inflation risks.

"We expect the inflation path to be revised upward over the monetary policy horizon based on the expected effects of higher energy prices and hotter imported inflation," ING economists said.

"In addition, the ECB raised rates by 25 basis points in September, narrowing the interest rate differential with Hungary."

Hungary's inflation fell as the forint appreciated 5.8% against the euro this year, helped by Prime Minister Peter Magyar's government pledge to cut the budget deficit and put the country on a course to meet the conditions of adopting the euro.

Varga has said the central bank was preparing for a gradual lowering of its inflation target as part of Hungary's efforts to join the euro. At 1300 GMT, the bank will also publish updated economic forecasts.