The central bank will mount a legal challenge against the new law expanding the bank’s rate-setting Monetary Council

The Hungary’s central bank will mount a legal challenge against the new law expanding the bank’s rate-setting Monetary Council. MNB President Zsigmond Jбrai said the law, passed again by Parliament with modifications, having initially been sent back for review, infringes on the bank’s independence, going against the objective of EU law. Inflation in November was 5.8% yr/yr, somewhat lower than expected, Central Statistics Office (KSH) figures showed. Prices rose by 0.1% in November compared to the previous month. The lower than expected inflation figures were attributed to the slowing increase in food prices and stagnating prices of services. The government plans to raise some Ft 300 billion (Ђ1.21 billion) by selling state assets in 2005, including stakes in MOL Rt, FHB Rt and Antenna Hungбria Rt. Hungary is selling state-owned stakes to help finance the budget deficit as the nation spends money to bring its road network and health system up to EU standards. The quota for greenhouse gas emissions was set at 93.7 million tons for the period 2005–2007. The government will distribute carbon credits to businesses free of charge in February, with the exception of 2.5% of the credits, which it will auction off, with the revenue to go toward renewable energy and other environmental projects. M&A activity in Hungary remained flat in 2004, according to a study by KPMG. Just 75 deals were made in Hungary up to November, compared to 121 a year earlier. The deals were worth a combined $1.8 billion, compared to $1.7 billion in 2003, a fall in real terms given the dollar’s decline against the forint. Hungary’s Eximbank signed a framework deal with its Russian counterpart Rosseximbank, along with Hungarian export insurer Mehib Rt, to jointly support or finance projects in Asia, South America and southern Europe. The agreement will help Hungarian and Russian businesses realize joint investments in third countries.