The National Bank of Hungary (MNB) cut its base rate by 25 basis points to 6.00% at its latest monetary policy meeting, a move that was in line with both Standard Chartered's expectations and the Bloomberg consensus [1]. According to Standard Chartered’s Saabir Salad, the central bank delivered notably dovish forward guidance, explicitly referencing the possibility of further easing this year in both its official statement and Governor Varga’s press conference [1]. Governor Varga signaled that two additional rate cuts could occur over the summer [1].
The decision to resume and accelerate the easing cycle follows a period of delay attributed to the Middle East conflict [1]. The central bank’s communication highlighted significantly lower Consumer Price Index (CPI) projections and a strong Hungarian Forint (HUF) as key factors supporting the more aggressive easing stance [1].
Standard Chartered now expects the policy rate to bottom at 4.50%, with the base rate forecasted to reach 5.25% by the end of 2026, compared to a previous forecast of 5.75% [1]. The bank’s guidance suggests that rate cuts are likely to be both faster and deeper than previously anticipated [1].
No immediate market reaction or analyst opinions beyond Standard Chartered’s outlook were discussed in the article.
CONCLUSION
The National Bank of Hungary’s dovish guidance and explicit signaling of further rate cuts point to an accelerated easing cycle, driven by lower inflation projections and a strong currency. Standard Chartered now anticipates a deeper and faster rate-cutting path, with the policy rate expected to reach 4.50%.