- 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 %, with the overnight deposit and collateralised loan rates unchanged at 5.50 % and 7.50 %, citing the need to preserve positive real interest rates while balanced risks surround the inflation outlook. The policy rate has remained at 6.50 % since January 2025. The unchanged corridor supports financial-market stability and anchors inflation expectations alongside a stronger forint. Headline and core inflation eased to 3.3 % and 3.8 % in December, averaging 4.4 % in 2025; the MNB projects a brief dip below the 3 % target in early 2026 before inflation temporarily nears the upper end of the tolerance band, with sustainable convergence to target expected in H2 2027. Retail sales are expanding but industrial and construction output are contracting, labour-market tightness is easing yet unemployment stays historically low, and the current-account surplus is forecast to hold around 2 % of GDP. Externally, global trade and geopolitical tensions, higher oil and gas prices and sensitive risk sentiment persist, while markets price two Federal Reserve cuts this year and no change from the European Central Bank. The Council reiterated that tight conditions will be maintained and that future decisions will be cautious and data-driven, with particular attention to start-of-year repricing and financial-market 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.