Hungarian Central Bank Cuts Rate to 6% as Markets Anticipate Euro Adoption

The Magyar Nemzeti Bank (MNB) reduced its base interest rate by 25 basis points on June 23, bringing it to 6.00%. The move followed an earlier cut of the same magnitude and came amid a weaker forint that had fallen after the June 23 decision.

Fund managers at Equilor Alapkezelő noted that the market had priced in a potential government change and a wave of investor optimism ahead of the April 12 parliamentary elections. They highlighted the growing share of foreign institutional investors in Hungarian sovereign bonds and linked the asset‑price rally to expectations that Hungary will adopt the euro.

Monetary‑policy council member Varga Mihály said the easing of global risk factors and the release of €16.4 billion in EU funds have expanded the central bank’s policy space, allowing for further rate cuts while maintaining a positive real rate. He pointed to lower inflation pressures, a stronger forint and reduced energy‑import financing needs as supporting factors for continued easing.