The MNB base rate has been cut by 25 bps to 6.25% today

HUNGARY - In Brief 24 Feb 2026 by Istvan Racz
For the first time since September 2024, the MNB base rate was reduced by 25 bps at today's monthly rate-setting meeting. The interest rate corridor around the base rate was kept at +/-1%-point. The decision corresponded to broad expectation, as regards analyst views and market pricing. There appeared to be some probability of a 50 bps rate cut this time, but as Mr. Varga told journalists after the meeting, the Council discussed only the 25 bps rate cut option.The Governor also said that the rate cut was possible as January inflation was in line with the Bank's December forecast, and as both the international cost environment and households' inflation expectations have developed in a favourable way. Early-year repricing was only moderate, and disinflation appeared to be broad-based, as regards the key product components included in the CPI basket.Importantly, Mr. Varga stressed that the MNB has not decided to start a new loosening cycle. Using a slightly different phrase, he said the MNB has not committed itself to follow any specific path of interest rates. Instead, they will continue making data-driven, case-by-case decisions at each monthly meeting. He stressed the importance of assessing the consequences of any rate decision before the next step would be made.Asked how the recent negative events around the Druzhba oil pipeline would affect inflation prospects and also what his view was regarding a US-provided 'financial shield' to Hungary, which once again came up at Secretary Rubio's recent visit to Budapest, Mr. Varga said the MNB sees neither a significant inflation risk nor a material oil supply risk stemming from Druzhba's inoperative state at this moment, and...

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