Central Bank Leaves Primary Exchange Rate Unchanged

The Monetary Council of the National Bank of Hungary (MNB) left the central bank base rate unchanged at 6.50% at its meeting this Tuesday.

In a statement on its website, MNB says that its primary objective is to achieve and maintain price stability. Without prejudice to its primary objective, the Magyar Nemzeti Bank preserves financial stability and supports the Government’s economic policy, as well as its policy on environmental sustainability.

Ongoing trade and geopolitical tensions continue to create an uncertain global economic environment. The trade agreement concluded at the end of July between the European Union and the United States mitigated the uncertainty. However, the deadline for the negotiations between China and the United States was extended by a further 90 days. The global growth outlook improved sligthly during the past month. The expenditure-increasing programmes announced in the European Union and those approved in the United States could stimulate growth from the next year onwards.

The upward effect of tariffs on inflation expectations, further rises in global food prices, as well as continued high price dynamics in market services pose upside risks to global inflation. Energy prices decreased slightly since the previous interest rate decision.

International financial markets continue to react sensitively to trade and geopolitical developments. The US benchmark stock market indices reached a historic high while US long-term yields decreased. Following the release of unfavourable economic data, the Federal Reserve’s expected interest rate path shifted downwards. Markets price in at least two 25 basis point rate cuts until the end of the year. In the case of the European Central Bank, markets continue to price in at most one further 25 basis point interest rate cut for the same period. Over the past month, among the regional central banks, the Czech and Romanian central banks kept interest rates unchanged.

Hungarian economy remained subdued in 2025 Q2, as well. GDP rose by 0.1 percent in a year-on-year comparison. The incoming data was consistent with the projection in the June Inflation Report. The performance of services had a positive effect on gross domestic product, while industry and agriculture restrained it. In parallel with the stable growth of household consumption, the decline in investment is prolonged, while the export of tradables is generally constrained by the uncertain global environment. The unemployment rate has remained low, while the rate of wage growth slowed in May, the MNB statement says.