National Bank of Hungary cuts base rate by 25 basis points to 6.00%

The National Bank of Hungary’s Monetary Council cut the central bank base rate by 25 basis points to 6.00% effective 24 June 2026, lowering the O/N deposit rate to 5.00% and the O/N collateralised loan rate to 7.00%, after concluding that the inflation outlook had improved significantly as the stronger forint and lower energy and food prices pushed inflation down while easing geopolitical tensions made the global risk environment more favourable. In May, inflation and core inflation fell to 1.8% and 2.0%, and the June forecast puts average inflation at 1.8% in 2026, 2.3% in 2027 and 3.0% in 2028, with price growth expected to remain below the central bank’s 3% target through the rest of 2026 and 2027. Hungary’s GDP rose 1.7% in 2026 Q1, mainly on stronger domestic demand, and the central bank expects 2.0% growth in 2026 as household consumption drives the pickup; retail sales and industrial production both increased in April. The current account balance is expected to deteriorate temporarily in 2026 and then remain close to equilibrium, while the Council said euro sale transactions related to energy import coverage had helped maintain foreign exchange market stability and will remain available until 30 June 2026. The central bank said global oil and European gas prices had started to decline after the easing of the Iran conflict, though they remained above pre-conflict levels, and signalled room for further rate cuts through the summer if favourable developments persist, whil