Hungary’s central bank left its benchmark interest rate on hold at 6.5% for the 10th straight month on Tuesday, as inflation remains above the bank’s 2%-4% tolerance range, effectively ruling out any policy easing for now.
The bank said last month that it expected to reach its 3% inflation target only in early 2027, projecting mostly upside risks to price trends from tariffs, food and services, and downside risks to economic growth, which it projects at 0.8% this year despite government efforts to kickstart the economy.
The NBH would need to see faster and more durable disinflation to consider any easing in monetary conditions, Deputy Governor Zoltan Kurali told Reuters after the June meeting, adding that rate cuts were off the table as long as inflation exceeded the bank’s tolerance band.
Tuesday’s decision was in line with the median forecast of 13 economists in a Reuters poll.
“The NBH has kept its base rate unchanged for the past 10 rate-setting meetings and struck a hawkish posture in its communication,” Goldman Sachs said in a note.
After easing in April, Hungary’s headline inflation rebounded to 4.4% in May and then to 4.6% in June, even though core inflation slowed in June.
Goldman analysts said that while the forint has firmed in recent weeks to around 400 versus the euro, the bank would likely reiterate its stance that tight monetary policy remains warranted until late 2025.
“In light of the somewhat stronger HUF, the weakness of Q1 GDP data and signs of a slowdown in wage growth, we continue to believe that the NBH will open the door to a rate cut before year-end,” they added.
The analysts polled by Reuters poll projected one 25 basis-point cut in the base rate by the end of this year.
The bank will release a statement about its decision at 1500 local time (1300 GMT), when Governor Mihaly Varga will also hold a news conference.
At 1204 GMT, the forint 
EURHUF traded at 399.25 versus the euro, steady from its levels before the rate announcement.