FX.co ★ Hungary’s Central Bank Holds Interest Rate at 6.5%

The National Bank of Hungary maintained its key interest rate at 6.50% for the 14th consecutive session on November 18, meeting market expectations. The central bank cited ongoing trade and geopolitical tensions as key factors contributing to a persistently uncertain global environment, with the European growth outlook still lacking momentum. Additionally, increasing fragmentation in supply chains and elevated service price dynamics present potential inflationary challenges. The European Central Bank also held its rates steady, signaling no imminent rate cuts. In October, overall inflation was recorded at 4.3%, with core inflation slightly rising to 4.2%. While price restrictions have assisted in mitigating inflationary pressures, high price indices remain in areas beyond their influence. Since early 2025, the forint has strengthened, contributing to a reduction in purchase prices. Nevertheless, inflation expectations among businesses and households remain elevated, albeit slightly reduced. The Monetary Council highlighted the importance of a cautious yet stringent monetary policy stance.