The Monetary Council of the Hungarian National Bank (MNB) lowered its base interest rate by 25 basis points, from 6.5 per cent to 6.25 per cent on Tuesday, 24 February. This marks the central bank’s first rate cut since September 2024, signalling a cautious but positive shift in monetary policy.
The Hungarian national currency Forint has been trading relatively high on foreign exchange markets recently. As of the time of writing this, one US Dollar goes for around 322 HUF, while one Euro goes for 379 HUF. By comparison, both major currencies traded for above 400 HUF at the beginning of last year.
The decision to cut rates was precipitated by, among other factors, a favourable monthly inflation report for January 2026. According to Hungary’s Central Statistics Office (KSH), year-on-year inflation was just 2.1 per cent in the country last month, the lowest since March 2018.
Analysts expect another 25-point cut coming at the next Council meeting in March.
Interestingly, the primary Hungarian stock index BUX dropped by 1.83 per cent on the day the rate cut was announced by the national bank. However, it is still closed up 12.32 per cent year-to-date, heavily outperforming the Dow Jones index (up 1.65 per cent YTD) in the United States and the EURO STOXX 50 index (up 4.55 per cent YTD) in Europe.
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