Base Rate Cut by NBH as Inflation Undershoots Forecasts
- 26 Aug 2026 7:23 AM
The Monetary Council of the National Bank of Hungary (NBH) decided to cut the central bank base rate by 25bp to 5.50pc at a monthly policy meeting on Tuesday.
The Council also lowered the central bank's symmetric interest rate corridor by 25bp, bringing the O/N deposit rate to 4.50pc and the O/N collateralised loan rate to 6.50pc.
In a statement released after the meeting, the Council said inflation developments were below the baseline scenario projected in June, while the risk premium on domestic assets had remained stable.
"These factors have preserved the Monetary Council's room to manoeuvre," they added.
The Council noted that July inflation had slowed to 1.2pc, below market expectations as well as the forecast in the central bank's June Inflation report.
They added that CPI was set to stay under the 3pc target for the rest of the year and throughout 2027 before returning to the target in H1 2028.
"Looking ahead, Hungary's risk assessment will be primarily influenced by expectations regarding the fiscal path and the adoption of the euro, as well as the external market environment," the Council said.
Full report available here
Source: MTI – Hungary’s national news agency since 1881.
Graphic: MNB
*********************************************************************************************
You're very welcome to comment and discuss this via our Facebook page: XpatLoopNews
& via: Budapest Expats - The International Community / Expats Hungary - The Original Group
You can subscribe to our newsletter here: XpatLoop.com/Newsletters
LATEST NEWS IN finance