In remarks at the Istanbul Economic Forum, National Bank of Hungary Governor Mihály Varga reiterated that monetary policy must remain cautious and data driven as higher energy prices and geopolitical tensions threaten price stability. He said the disciplined stance maintained over the past 18 months helped create the conditions for lowering the medium term inflation target to 2.5 percent from Jan. 1, 2028, following the bank’s review of its inflation targeting framework. Varga emphasized that the Monetary Council will focus on developments affecting the medium term inflation outlook rather than react to every new data point. Decisions will continue to reflect the inflation outlook, global developments and domestic risk premia. He said the lower target should support more moderate inflation, a more predictable economic environment and lower financing costs over the longer term.
National Bank of Hungary Governor reiterates cautious policy stance ahead of 2.5 percent inflation target
National Bank of Hungary Governor Mihály Varga reiterated that monetary policy will remain cautious and data driven amid energy price and geopolitical risks. The bank’s 2.5 percent medium term inflation target takes effect on Jan. 1, 2028, with decisions guided by the inflation outlook, global developments and domestic risk premia.