Hungarian Forint: New inflation target demands hawkish MNB – Commerzbank
Commerzbank’s Tatha Ghose notes the National Bank of Hungary paused cuts at 5.50% but lowered its medium‑term inflation target to 2.5% while simultaneously lifting 2027 inflation forecasts.
The Hungarian National Bank (MNB) has paused its rate-cutting cycle, leaving the base rate unchanged at 5.50%, while lowering its medium-term inflation target to 2.5% for 2028. This shift, combined with the MNB raising its 2027 inflation forecast from 2.3% to 3.1%, suggests a more restrictive monetary policy stance. However, the bank still maintains the option to hold or cut rates, which has not encouraged investors to expect a rate hike in the near future.
The weaker Hungarian forint is expected to remain so until the MNB clearly adopts a more hawkish approach.
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