Monetary Council Keeps Central Bank Base Rate at 6.5%

At its meeting on 19 November 2024, the Monetary Council of the National Bank of Hungary (MNB) reviewed the latest economic and financial developments and decided on leaving unchanged the central bank interest rate at 6.50% with effect from November 20, 2024.

According to a statement by the Monetary Council, the primary objective of the National Bank of Hungary 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.

In 2024 Q3, economic growth continued at a moderate pace in Europe. In the US, the labor market remained strong and the economy grew steadily. Chinese economic growth slowed slightly. European economic activity may be subdued mostly due to the prolonged weak industrial production, while the ongoing Russia-Ukraine war, the intensification of the conflict in the Middle East and the generally tense geopolitical situation remain key risks. The outlook for economic growth next year deteriorated in the euro area, and it improved moderately in the US, while there were no changes in China.

Slightly rising in October, inflation stood at 2% in the euro area and price dynamics moderately accelerated in the US. Looking ahead, moderate inflation rates are expected as global economic demand remains subdued; however, the stronger price dynamics of market services still represents an inflationary effect. As a result of geopolitical conflicts, the developments in oil and gas prices are surrounded by increased volatility, and looking ahead by uncertainty, the statement says.