MNB holds base rate at 6.25%

The Monetary Council of the Hungarian National Bank (MNB) left the base rate unchanged at 6.25 % effective 25 March, with the overnight (O/N) deposit and O/N secured loan rates kept at 5.25 % and 7.25 %, respectively, judging that heightened geopolitical tensions, a sharp rise in energy prices and elevated global risk aversion warrant “cautious and patient” policy to anchor inflation expectations and safeguard market stability. After maintaining the base rate at 6.50 % throughout 2025, the Council delivered a 25 bp cut in February 2026 before pausing at the current meeting. The interest-rate corridor remains ±100 bp around the base rate, and the MNB will continue to supply FX liquidity—activated on 10 March to cover energy-import needs—to preserve orderly market conditions while ensuring a positive real policy rate. Headline inflation fell to 1.4 % y/y in February (core 2.1 %), but the Bank expects surging energy costs to lift inflation above the 3 ± 1 pp tolerance band from Q3 2026 before it returns sustainably to target in H2 2027; average CPI is projected at 3.8 % this year and 3.7 % in 2027. GDP grew 0.8 % y/y in 2025 Q4, with household consumption buoyant amid rising real wages, though investment and net exports lag; growth is forecast at 1.7 % in 2026 and 3.0 % in 2027, with risks skewed toward weaker activity. The current account is seen narrowing temporarily in 2026 before settling around a 1 %-of-GDP surplus by 2028. Citing unchanged ECB and Fed stances, a recent Pol