Hungarian central bank (NBH) rate-setters kept the base rate unchanged at 6.75% at a regular policy meeting on Tuesday. The Monetary Council also decided to keep the central bank’s O/N deposit rate at 5.75% and the O/N collateralised loan rate at 7.75%. Barnabás Virág, the NBH’s deputy governor, said today’s pause in rate cuts was in line with the bank’s stability-focused monetary policy, but further cautious reductions may be possible in the upcoming period. July headline and core inflation have inched higher, Virág told an online press briefing after the rate decision, noting that headline inflation again exceeded 4%, mainly on the back of higher food prices.
Still, the longer-term inflation outlook was unchanged and the price index would return to the tolerance band in the coming months, he said. Disinflation may start to take hold from the first quarter of 2025, he added.