The Council also left the O/N deposit rate at 5.50pc and the O/N collateralised loan rate at 7.50pc. The rates mark the ends of the central bank's symmetric interest rate corridor.

In a statement released after the meeting, the Council said it had left the base rate on hold "in line with the stability-oriented approach" and reiterated their commitment to achieving the inflation target in a sustainable manner.

The Council said maintaining tight monetary conditions was "warranted" and that a "careful and patient" approach to monetary policy remained necessary due to risk to the inflation environment.

"The Council is constantly assessing incoming macroeconomic data and factors influencing the inflation outlook, in particular repricings at the start of the year and the stability of financial markets, based on which it will take decisions on the level of the base rate in a cautious and data-driven manner from meeting to meeting," the rate-setters said.

"Monetary policy contributes to the maintenance of financial market stability, the anchoring of inflation expectations consistently with the central bank target and, as a result, to the achievement of the inflation target in a sustainable manner by ensuring positive real interest rates," they added.

The minutes of the meeting on Tuesday will be published at 2:00 in the afternoon on February 11.

At a press conference after the meeting, central bank governor Mihaly Varga said the decision to keep the base rate on hold was unanimous and it was the only proposal discussed.

He added that forward guidance remained unchanged.

He acknowledged a decline in headline inflation to 3.3pc in December, within the bounds of the central bank's tolerance band, and said there was a "good chance" CPI could fall under the 3pc target early in 2026. He also pointed to the importance of repricings on the inflation outlook. He added that households' inflation expectations were stagnating and businesses were projecting moderate price increases.

Varga said the stability of the FX market was "key" to moderating inflation expectations. He added that the more than 6pc strengthening of the forint to the euro since early 2025 was gradually showing up in producer prices and could soon pass through to consumer prices.

Fielding questions, Varga said there was no proposal at present to boost the central bank's gold reserves over 110 tonnes.

He reiterated that the NBH had no exchange rate target.

Full report available here.
 

Source: MTI – Hungary’s national news agency since 1881. While MTI articles are usually factual, some may contain political bias, and readers should be aware that such content does not reflect the position of XpatLoop, which is neutral and independent.

Since the goal of XpatLoop is to keep readers well briefed, right across the spectrum of opinions, MTI items are shared to ensure readers are aware of all narratives within the local media.

XpatLoop believes in empowering readers to form their own views through complete and comprehensive coverage. To facilitate this XpatLoop has a balanced range of news partners, as you can see when you surf around XpatLoop.com
 

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