Hungary Interest Rate

The National Bank of Hungary maintained its basic interest rate by 6.50% for the seventh consecutive meeting in April, the highest rate of the European Union, in line with what markets expected. Overnight rates for central bank deposits and warranty loans also remained unchanged by 5.5% and 7.5%, respectively. The central bank noted that tariffs by the United States and potential retaliation from the world's largest economies leave an uncertain macroeconomic outlook, supporting the case for interest rates to remain unchanged. Policymakers also noted that while tariffs and the weaker forint against the euro lift inflationary risks, the lower energy prices due to lower global demand are likely to ease cost pressures for domestic firms. The latest data showed that consumer inflation decreased to 4.7% in March, as well as core inflation, which fell to 5.7%.