- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 6.5%
The Monetary Council of the Magyar Nemzeti Bank (MNB) kept the base rate at 6.50 % on 23 September 2025, with the overnight deposit and collateralised lending rates held at 5.50 % and 7.50 %, respectively, arguing that persistent upside inflation risks amid fragile trade and geopolitical conditions require the preservation of a restrictive stance. The base rate has been unchanged at 6.50 % since January 2025. To reinforce transmission and market stability the MNB will continue its daily T/N FX-swap tenders and weekly discount bill auctions. August headline inflation was 4.3 % and core inflation eased to 3.9 %; nonetheless, the Bank expects consumer-price growth to average 4.6 % in 2025, remain above its tolerance band through year-end, return to the band in early 2026 and meet the 3 % target in early 2027. GDP stayed sluggish in Q2, lifted mainly by household consumption while investment fell, leading the MNB to trim its 2025 growth forecast to 0.6 % before a rebound to 2.8 % in 2026 and 3.2 % in 2027; household credit is projected to expand 17–20 % this year versus a modest 2 % rise in corporate loans, with banks’ capital and liquidity described as strong. The current-account posted a EUR 241 mn surplus in July and is seen at about 1.3 % of GDP for 2025, supported by a firming forint, before improving further as external demand recovers. Highlighting the Federal Reserve’s September rate cut, steady ECB policy, and lingering geopolitical frictions as external uncertainties, the Council reiterated that a “careful and patient” approach is essential and deemed existing tight monetary conditions appropriate to anchor expectations and secure durable price stability.
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.