- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 6.5%
The Monetary Council of the Magyar Nemzeti Bank kept the central-bank base rate unchanged at 6.50 % from 26 March 2025, with the overnight deposit and collateralised lending rates also steady at 5.50 % and 7.50 %, citing persistent upside inflation risks, trade-policy and geopolitical tensions, and a still-uncertain external environment that call for continued tight monetary conditions to secure a sustainable return to the 3 % inflation target. This marks the third straight meeting—January and February included—at which the base rate has been held at 6.50 %. The ±1 pp rate corridor is unchanged, and the central bank will keep daily T/N FX swap tenders at a 6 % implied rate alongside weekly discount-bill auctions to buttress market stability. February headline inflation accelerated to 5.6 % and core to 6.2 %, and the bank projects CPI at 4.5-5.1 % in 2025, easing to within the 2-4 % tolerance band only in early 2026 as GDP growth, driven by rising real wages and tax cuts, is forecast at 1.9-2.9 % this year and 3.7-4.7 % in 2026; unemployment in January inched up to 4.4 %. The current-account surplus reached EUR 345 mn in January and is seen at 1.2-2.6 % of GDP in 2025. Policymakers highlighted volatile global sentiment, halted global disinflation and diverging major-central-bank actions—ECB’s 25 bp March cut versus an unchanged Fed stance—as key external risks, and reaffirmed that a “careful and patient” approach will persist until inflation expectations align durably with target.
Rate evolution
From May 2025 to September 2026, the National Bank of Hungary lowered the central bank base rate by 100 basis points to 5.50%, holding it at 6.50% for most of the period before a February 2026 cut, a pause through May, 25-basis-point reductions in June, July and August, and a hold in September. The long hold reflected inflation above the tolerance band, persistent market services and core pressures, strong corporate repricing, high household inflation expectations and a desire to preserve tight conditions amid tariff, trade and geopolitical tensions, while growth stayed weak outside consumption. Through late 2025, the Monetary Council saw mostly upside risks to inflation and downside risks to growth, but by December and January it judged the inflation outlook balanced as disinflation broadened and the stronger HUF improved costs, despite uncertainty over start-of-year repricing and price restrictions.
After cutting in February because favourable underlying inflation and stable financial markets allowed it, the National Bank of Hungary held the central bank base rate at 6.25% from March to May as Iran-related energy shocks and global uncertainty revived upside inflation risks, even as inflation moved near the lower bound of the tolerance band. It then cut the rate to 6.00% on 23 June as the June forecast showed a significantly improved inflation outlook and balanced inflation risks, before reducing it to 5.75% on 21 July after June inflation fell to 1.7% and core inflation held at 2.0%, below the forecast, while slower food price growth and a persistently lower risk premium on domestic assets preserved room to manoeuvre despite escalating USA-Iran tensions and higher oil and European gas prices. The Monetary Council cut the central bank base rate by a further 25 basis points to 5.50%, effective from 26 August, and held it at that level at its 22 September meeting.