MNI NBH Preview - August 2025: "Disciplined" Approach Expected

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Executive summary:

• The National Bank of Hungary is expected to keep the base rate on hold at 6.50% again this month, sticking to its ‘cautious and patient’ approach to monetary policy.
• Officials are likely to strike a hawkish tone and reiterate their commitment to achieving and maintaining price stability given that headline inflation expected to remain above the upper bound of the central bank’s tolerance range in the coming months.
• A summary of sell-side analyst views will be published next week.  

Last month’s policy statement retained a cautious tone, reiterating that a “careful and patient” approach to monetary policy remains necessary, and was for the most part unchanged from June. The most notable part of the meeting came with the announcement of the tweak to the required reserve ratio for commercial lenders – which was cut to 8% from 10%, effective August 1 – although policymakers stressed that the change does not imply a shift in its tight stance on monetary policy, which subdued any market reaction.

The only comments we have had from the NBH since the July meeting have come from Governor Mihaly Varga, who spoke ahead of the annual Jackson Hole Symposium. Varga reiterated that Hungary’s central bank is focused on a “careful and patient” monetary policy to anchor inflation expectations amid upward price pressures, and that “disciplined” monetary policy is needed to maintain market stability.