FX.co ★ Hungary Leaves Base Rate Unchanged for 8th Month

The National Bank of Hungary maintained its key interest rate at 6.50% for the eighth consecutive meeting as of May, aligning with market predictions. Similarly, the overnight central bank deposit rate and the collateralized loan rate were kept steady at 5.5% and 7.5%, respectively. This decision underscores the bank’s cautious approach, given that inflation hovers near the upper limit of its tolerance range. In April 2025, headline inflation reduced to 4.2%, while core inflation was recorded at 5.0%. The Hungarian economy experienced stagnation in the first quarter of 2025, with lackluster outcomes in both the industrial and construction sectors. Meanwhile, retail trade showed a slight uptick in March, but consumer confidence continued to be at a low level. The National Bank of Hungary reiterated its dedication to a strict monetary policy strategy, aiming to anchor inflation expectations and secure long-term price stability.