The Monetary Council of the National Bank of Hungary (MNB) voted unanimously to keep the central bank’s base rate on hold at 6.25% at a meeting in March, minutes released on Wednesday show.
The rate-setters discussed a single option at the meeting on March 24, MTI reports.
With the outbreak of the conflict in the Middle East, the council members acknowledged a “significant increase” in uncertainty with regard to the financial market as well as outlooks for global economic growth and inflation.
They highlighted the upward risk to inflation posed by surging oil and gas prices, and strong volatility on the forint market amid increased risk aversion. They also noted that Hungary’s economic fundamentals were in better shape at present than during the period preceding the 2022 energy crisis.
Although the CPI projection in the MNB’s March Inflation Report was higher than the forecast in the previous report published in December, the rate-setters determined that the 3% inflation target could still be achieved in a sustainable manner in the second half of 2027.
The council said maintaining tight monetary conditions “remained warranted” and stressed the need for a “careful and patient” approach to monetary policy.
“The council would continue to assess incoming macroeconomic data and financial market developments in terms of their impact on the inflation outlook, based on which they would make decisions on the base rate in a cautious and data-driven manner,” the minutes show.
