HUF: Rate hold continues – Commerzbank

The Hungarian National Bank (MNB) is widely expected to leave its base rate unchanged at 6.50% at today’s meeting, continuing its prolonged policy hold for the thirteenth consecutive month. This decision will likely come despite renewed government pressure for monetary easing recently, while the central bank remains focused on safeguarding financial stability and curbing inflation, Commerzbank's FX analyst Tatha Ghose notes.

MNB set to hold rates for 13th Month

"Governor Mihály Varga has reiterated the need for a "careful and patient approach" stressing that tight monetary conditions are necessary to ensure positive real interest rates and to anchor persistently high inflation expectations, which are still hovering around 8%. Officials remain wary of underlying price pressures, especially in services and food, and have cautioned that the fight against inflation is not over."

"The bank’s own projections show inflation remaining near the top of its target band through 2026, reinforcing the case for maintaining high rates. While there is political pressure for cuts, the risk of genuine interference is seen to be low, which is being borne out over time and is helping bolster MNB's credibility."

"Forward markets do not anticipate any rate cuts within the next 3 months at least, but there is broadbased expectation that the rate will be cut at some point during H1 2026. The hawkish policy stance in the face of government pressure was the primary driver of the forint's strong performance this year."