Analyst commentary: when is an interest rate cut expected?

One ​​of the central bank’s main tasks is to curb inflation, and in this context, it would like to see inflation expectations around the 3 percent level. This way, price increases can slow down permanently and return to the 3 percent level. The MNB examines the economic environment in a complex way, which means that it adjusts the base rate in light of international economic developments and changes in Hungary.

Regarding the development of the forint exchange rate, Central Bank Governor Mihály Varga said that the favorable effects of the forint appreciation can be seen in the import price index of goods and the domestic sales prices of the manufacturing industry. He pointed out that the central bank still does not have an exchange rate target, and the current stronger forint exchange rate is the result of strict and strict monetary policy.

According to the expert, based on the central bank’s commentary, an interest rate cut this year is very unlikely, meaning that the rate could end the year at its current level.

“Since, among other things, incoming macroeconomic data, the market environment and Hungary’s international perception determine the central bank’s decisions, it is difficult to give a specific date for the next interest rate cut. Looking at the inflation trajectory, there may be a good chance of an interest rate cut in February 2026, as inflation next January may even fall below the 3 percent level,”

said Dávid Németh. He also said: “Overall, based on the current outlook, we see a chance for two interest rate cuts next year, as accelerating inflation can be expected in the second half of the year.”