CEEMEA Blog: Hungary: NBH opens door for front-loaded easing

Research evidence excerpt

CEEMEA Blog: Hungary: NBH opens door for front-loaded easing

Deutsche Bank

Research

Emerging Europe Economics Date

Hungary 24 June 2026

CEEMEA Blog

Hungary: NBH opens door for front-

loaded easing

Twisha Roy

The NBH on Tuesday eased policy rates by 25bps to take it to 6.00%. The decision

Economist

was in line with our and consensus forecasts, and was accompanied by NBH +44-20-754-52413

communication that rate easing is likely to continue in coming months, as we had

anticipated. However, both inflation forecasts as well as the revised forward

guidance highlighting continued back-to-back easing through the summer was

more explicitly dovish than we had been anticipating.

The press statement highlighted that a significantly improved inflation outlook,

easing geopolitical risks and hence a more favourable global risk environment

along with lower risk premium on domestic assets allowed room for the rate cut.

These were broadly in line with expectations. However, in a more significant dovish

shift, the reference to a careful and patient approach to monetary policy has been

dropped from the forward guidance. Additionally, the statement has clearly noted

that further interest rate cuts are likely to continue through the summer, before

the NBH reassesses its stance at the September meeting when new forecasts are

due - "Looking ahead, if favourable developments persist, the Council – while

maintaining a positive real interest rate – sees room for further interest rate cuts

throughout the summer, with a decision on their continuation to be made based on

the September Inflation Report".

In fact, governor Varga, in the post meeting press conference, noted that he expects

a “mini" interest rate easing cycle and that another two 25bps rate cuts look likely

over the summer.