This marks the third consecutive meeting where policymakers have opted to leave the rate unchanged.
The council also maintained the overnight deposit rate at 5.50% and the overnight collateralized loan rate at 7.5%, maintaining the symmetric interest rate corridor.
In a statement, the Council cited ongoing geopolitical tensions and uncertainty surrounding global interest rate paths and fiscal policies as key factors for holding rates steady. Policymakers warned that these conditions are increasing inflation risks through heightened risk aversion toward emerging markets.
“Restrictive monetary policy contributes to the maintenance of financial market stability and the achievement of the inflation target in a sustainable manner by ensuring positive real interest rates,” the Council said.
The MNB emphasized the importance of ensuring short-term interest rates align with the levels determined by the Council across all sub-markets and periods. In December, the Bank plans to employ longer-maturity instruments, alongside daily FX swap tenders and weekly discount bill auctions, to smooth financial market fluctuations and support monetary policy transmission.
At a press conference following the meeting, Deputy Governor Barnabás Virág noted that inflationary pressures have shifted the expected return to the 3% inflation target to 2026. Despite the delay, he added, inflation is expected to stay within the tolerance band for most of 2025.
The MNB’s latest quarterly Inflation Report projects average annual inflation of:
The Hungarian economy is expected to grow by:
Virág attributed the subdued growth in 2024 to external factors beyond monetary policy, such as lower agricultural output, weaker German industrial production, and postponed investments. However, he said economic growth would gain momentum from mid-2025, driven by increasingly broad foundations.
During the meeting, the majority of rate-setters voted to maintain the base rate at 6.50%, while one member proposed a 25 basis point rate cut.
Policymakers stressed the importance of a “careful and patient approach” to monetary policy, noting that geopolitical tensions, volatile financial markets, and inflation risks justify further caution in adjusting interest rates.
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