- 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 percent, with the overnight (O/N) deposit and collateralised lending rates unchanged at 5.50 percent and 7.50 percent respectively, citing the need for “careful and patient” policy amid balanced but still significant inflation risks and an uncertain global backdrop. The base rate has been steady at 6.50 percent throughout 2025 after the tightening cycle ended in late 2024. Operationally, the MNB will continue its stability-oriented stance through an unchanged ±100 bp interest-rate corridor and by offering longer-maturity FX-swap tenders and discount bill auctions to support market liquidity and transmission. Headline and core inflation fell to 3.8 percent and 4.1 percent in November, and the bank projects CPI at 4.4 percent in 2025, 3.2 percent in 2026 and 3.3 percent in 2027, with the 3 percent target seen sustainably met only in 2027 H2; GDP is expected to expand by 0.5 percent this year, 2.4 percent in 2026 and 3.1 percent in 2027 amid easing labour-market tightness and rising real wages. The current-account surplus should hover near 2 percent of GDP, helped by a stronger forint that is feeding through to lower import prices. Globally, modestly improving growth is offset by lingering trade and geopolitical tensions, while the US Federal Reserve has just cut rates by 25 bp and markets anticipate more easing, whereas the European Central Bank remains on hold; within CEE, Poland eased while Czechia and Romania stood pat. The Council reaffirmed that positive real rates and tight monetary conditions will be maintained, with future base-rate moves decided “from meeting to meeting” as new data on early-year repricing and financial-market stability emerge.
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.