Central Bank keeps rates unchanged in April

Latest decision: At its meeting on 29 April, the National Bank of Hungary (MNB) decided to leave all policy rates unchanged, with the base rate remaining at 6.50%—where it has been since September 2024. Prior to that, the Bank had lowered the base rate by 650 basis points from October 2023 to September.

Elevated uncertainty and high inflation drive hold: The key domestic factors that dissuaded the Bank from renewing its easing cycle were inflation above the 2.0–4.0% target and elevated economic uncertainty stemming from global tariffs. On the latter, the Bank commented that “risks to the path of the inflation projection have increased due to the different timing and opposite direction of the effects of tariff announcements.”

Rate cuts could resume later this year: The Bank didn’t give explicit guidance on future interest rate movements. Most panelists see interest rate cuts between now and end-2025, though several see rates on hold given that inflation is forecast to average above target throughout this year.

Panelist insight: Erste Bank’s Orsolya Nyeste said: “General uncertainties suggest maintaining a stability-oriented approach. However, we think that possible easing steps of major and other regional central banks may create room for cautious rate cuts later in the year, depending on inflation developments.” In contrast, ING analysts held a more hawkish view: “We expect the central bank to leave rates unchanged for the whole of this year, and we may see the first rate cut only at the beginning of next year. Inflation did show a downside surprise in March compared to market expectations, but this was in line with the Central Bank’s forecast.”

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