Hungarian Central Bank Base Rate Left Unchanged

At its meeting on April 29, 2025, the Monetary Council of the National Bank of Hungary (MNB) reviewed the latest economic and financial developments and decided to leave unchanged the central bank interest rates (base rate at 6.50% and the overnight deőposit rate at 7.50%) with effect from April 30, 2025.

The National Bank of Hungary says on its website that its primary objective is to achieve and maintain price stability. Without prejudice to its primary objective, MNB preserves financial stability and supports the Government’s economic policy, as well as its policy on environmental sustainability.

Intensifying trade policy tensions, in addition to prolonged geopolitical conflicts, are creating a generally uncertain global economic environment. The impacts of constantly changing tariff policy plans on the real economy vary by region. In the United States, the risk of a recession has increased, while in the EU, the announced programs for expenditure hikes may dampen the restraining effects of slowing international trade on economic growth looking ahead, the statement points out.

It adds that in the United States, trade policy tensions are increasing inflation expectations, while in Europe the impact on prices is expected to be more muted for the time being. Against the backdrop of a deteriorating economic outlook, energy and commodity prices have fallen significantly, which points to lower inflation globally. Looking ahead, the upward effect of tariff announcements on inflation expectations, further rises in global food prices, and continued high price dynamics in market services pose upside risks to inflation.

There has been a significant increase in uncertainty in financial markets as well. Following the tariff hike announcements, equity indices fell sharply, while safe haven asset prices rose. US long-term yields were characterised by heightened volatility and European long-term yields declined substantially. The euro appreciated significantly against the US dollar. The European Central Bank lowered interest rates by another 25 basis points in April, and expectations of further interest rate cuts have intensified. The Federal Reserve’s expected interest rate path also shifted downward. In the CEE region, the Czech, Polish and Romanian central banks left their policy rates unchanged over the past month.