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National Bank of Hungary Review: The Rate Cut Has Arrived, but What’s Next?

After 16 months of steady rates, the National Bank of Hungary cut its key policy rate by 25 basis points to 6.25% in February, aligning with broad market expectations. The central bank’s forward guidance remains data‑driven and open‑ended, prompting ING to anticipate a second 25‑bp reduction in March and a cumulative 50‑75 bp easing through 2026. Inflation is projected to fall to about 1.5% year‑on‑year, the lowest since 2019, while the upcoming April election introduces forint volatility risk that could temporarily halt the easing cycle. Analysts also note a flattening yield curve that may steepen if further cuts are confirmed.