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The council also kept the overnight deposit rate at 5.25% and the overnight collateralized loan rate at 7.25%, marking the ends of the central bank’s symmetric interest rate corridor.
In a statement after the meeting, policymakers said maintaining tight monetary conditions remained warranted.
“A careful and patient approach to monetary policy remains necessary due to inflation risks arising from geopolitical tensions and the uncertain financial market environment,” the council said.
“The Council is constantly assessing the impact of incoming macroeconomic data and financial market developments on the inflation outlook, based on which it will take decisions on the level of the base rate in a cautious and data-driven manner,” it added.
“In the current economic environment, maintaining the stability of domestic financial markets, especially that of the foreign exchange market, is crucial in anchoring inflation expectations and thus achieving price stability,” the council said.
Policymakers noted that on March 10, following the start of the Iranian conflict, the central bank decided to meet major foreign exchange liquidity needs related to energy imports, ensuring balance on FX markets even during turbulent periods.
At a press conference after the meeting, Mihály Varga reaffirmed the council’s commitment to achieving the 3% inflation target in a sustainable manner.
He pointed to “significant uncertainty” stemming from geopolitical developments, but said Hungary’s economic fundamentals were stronger than at the start of the 2022 energy crisis.
Varga said policymakers had reviewed the central bank’s latest quarterly Inflation Report, which projects inflation reaching the price stability target sustainably in the second half of 2027, in line with the previous forecast published in December.
The report forecasts average annual CPI of 3.8% in 2026 and 3.7% in 2027, up from 3.2% and 3.3%, respectively, in the December report.
Inflation is expected to rise from March due to higher energy prices, partly offset by fuel price caps. From the third quarter of 2026, CPI is projected to exceed the central bank’s 3% ±1 percentage point tolerance band before returning to target in the second half of 2027.
The report puts GDP growth at 1.7% in 2026 and 3% in 2027.
The council said the outlook was characterized by mainly upside risks to inflation and downside risks to growth, citing scenarios including prolonged geopolitical tensions, faster consumption growth and slower-than-expected improvement in external economic activity.
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