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The council also maintained the overnight deposit rate at 5.5% and the overnight collateralized loan rate at 7.5%, preserving the current range of the central bank’s symmetric interest rate corridor. According to Trading Economics, the hold on rates extended the MNB’s pause for a 15th straight meeting, and was in line with market expectations.
The decision to keep the base rate on hold was taken “in line with the stability-oriented approach,” the council said. Policymakers reaffirmed their commitment to sustainably meeting the inflation target and said tight monetary conditions remain justified.
“The council is constantly assessing incoming macroeconomic data and factors influencing the inflation outlook, in particular repricings at the start of the year and the stability of financial markets, based on which it will take decisions on the level of the base rate in a cautious and data-driven manner from meeting to meeting,” the statement said.
Speaking at a press conference after the meeting, MNB governor Mihaly Varga commented on the latest quarterly Inflation Report, which is due to be published in full on Thursday. Varga said that underlying inflation was moderating and the average annual inflation forecasts for 2025 and 2026 had been lowered.
According to Trading Economics, the bank trimmed its 2026 inflation forecast to 3.2% from 3.8% and lowered its gross domestic product growth projection for the same year to 2.4% from 2.8%, citing a dual-speed economy, with robust private consumption offsetting weaker investment and net exports.
Varga said the fresh report shows headline inflation falling under the 3% target early in 2026, then temporarily rising close to the upper edge of the 2-4% tolerance band. The governor added that he believed the inflation target could be achieved in a sustainable manner in the second half of 2027.
However, Varga also noted that corporate price adjustments at the start of 2026, as well as the timing and impact of the rollback of government-mandated price restrictions, generated some uncertainty regarding the inflation outlook.
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