Hungary’s central bank lowered its benchmark interest rate by 25 basis points to 5.5% on Tuesday, marking the third consecutive reduction in policy easing.
The National Bank of Hungary said the decision reflected sustained disinflationary pressures, with consumer prices rising just 1.2% in July—the slowest pace since 2016. The bank had previously trimmed its 2024 inflation forecast to 1.8% in June from 3.8% in March, citing currency gains that reduced import costs.
All 20 economists surveyed by Bloomberg had anticipated the quarter-point cut. Governor Mihaly Varga is scheduled to hold a briefing at 3 p.m. local time to outline the policy stance and provide updated guidance.
Monetary policy decisions may hinge on the bank’s next quarterly inflation projections, due at the September meeting. Energy price volatility remains a risk, as optimism over a potential resolution to the U.S. conflict with Iran has waned, keeping crude markets elevated.
The central bank had signaled in June that three quarter-point reductions were possible before reassessing conditions, aligning with the latest move.
