Hungary's Central Bank Keeps Rates on Hold, as Expected; ING Sees 25bps Rate Cut in February

01:18 PM EST, 01/27/2026 (MT Newswires) -- Hungary's central bank (MNB) Tuesday said its Monetary Council left the key base rate at 6.5%, as expected by the majority of economists.

MNB noted in its policy statement that the Monetary Council also kept the o/n deposit rate at 5.5% and the o/n collateralized lending rate at 7.5%.

The forward guidance remained unchanged, and when combined with ING's inflation forecasts, it leads the bank to predict a 25bps rate cut in February 2026, the first such move since September 2024. With inflation likely to fall to around 2% year-on-year in Q1, the rate cut in February won't be a one-off, and ING expects the Monetary Council to follow this with another 25bps cut in March.

Overall, ING forecasts 75bps to 100bps of easing this year, with the base rate standing at 5.50% to 5.75% by the end of the year.

Although the chance of a rate cut in February is increasing according to market pricing, a rate cut is far from fully priced in, and the MNB has ample room to pause in February, added the bank. At the same time, the stronger forint (HUF), also supported by a weaker US dollar and hopes for a Russia-Ukraine peace deal, clearly shows that rate cuts won't be such a problem for the currency.

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