The Hungarian National Bank (MNB) on Tuesday left interest rates unchanged at 6.50 percent for the eighth time, in line with analyst expectations.
“The maintenance of tight monetary conditions is justified,” Portfolio quoted the bank as giving for their decision and forward guidance. The risks surrounding the inflation environment, as well as trade and geopolitical tensions, continue to necessitate a cautious and patient monetary policy, the portal further explained.
In September 2024, cut by 0.25 percentage points after it was decided in August to stabilize at 6.75 percent. But rates have since remained at 6.50 percent.
Rates had been as high as 13 percent back in 2022 when Hungary sought to curb one of the highest inflation rates in the European Union (at times reaching 26 percent).
Regarding the most recent decision, PKO BP economists wrote: “We expect the current level of interest rates to be maintained. Despite the recent decline in inflation, it still remains well above the target, and the market environment is too unstable to allow for further cuts. The next one can only be expected in the second half of this year.”
MNB’s new management also announced it would be selling one of its properties, home of the Balatonakarattyai Education and Conference Center. “Since the nature and maintenance of the property are not part of the central bank’s core tasks, the MNB’s board of directors decided to terminate the use of the building and subsequently sell the complex,” the release read. This is expected to save the bank some HUF 2.4 billion a year and result in 60 layoffs.
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