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# Hungary's Central Bank Holds Base Rate at 6.25% but Opens Door to Cuts
- URL: https://www.theglobalbanker.com/hungary-mnb-holds-base-rate-at-6-25-opens-door-to-cuts/
- Published: 2026-05-26T17:48:00.000Z
- Updated: 2026-10-24T01:37:55.000Z
- Description: The Magyar Nemzeti Bank kept its base rate at 6.25% on 26 May and signalled openness to easing if inflation fundamentals continued to improve.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe

The Magyar Nemzeti Bank held its base rate at 6.25% on Tuesday, keeping Hungarian monetary policy on hold for another month while noting that the inflation outlook had improved significantly. The Monetary Council left the overnight deposit rate at 5.25% and the overnight lending rate at 7.25%, keeping the interest-rate corridor unchanged around the base rate.

The new setting is effective from 27 May 2026\. 

#### TWO OPTIONS ON THE TABLE

Governor Mihály Varga confirmed after the meeting that policymakers had discussed two options at the May session, including a possible cut, before ultimately settling on a hold. 

Varga said the majority of the Monetary Council had voted to hold, but that there had also been a proposal to cut. The Council said uncertainty surrounding the inflation outlook may ease in light of incoming data and economic-policy information, and that all factors shaping the inflation trajectory will be assessed in the June Inflation Report.

The MNB has been weighing a stronger forint and inflation near the lower bound of its tolerance band (2.1% in April) against high global energy prices and geopolitical risks. The MNB said it would continue to ensure positive real interest rates in order to achieve the inflation target in a sustainable manner.

#### PATH TO EASING REMAINS CONDITIONAL

In its statement, the Monetary Council said it would take decisions on the level of the base rate in a cautious and data-driven manner, based on incoming macroeconomic data, financial market developments and the persistence of the decrease in risk premia.

The Council said a careful and patient approach to monetary policy remained necessary because of inflation risks arising from geopolitical tensions, and that price stability can be achieved through tight monetary conditions.

The corridor, kept unchanged with the overnight deposit rate at 5.25% and the overnight lending rate at 7.25%, is set at 1 percentage point either side of the base rate.

The abridged minutes of the meeting are due to be published on 10 June 2026.