MNI NBH Review - November 2025: Maintaining the Status Quo

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Executive summary:

• The November MPC meeting offered no surprises, with both the 6.50% base rate and the Bank’s hawkish guidance unchanged.
• Governor Mihaly Varga explicitly stated that the monetary council's forward guidance has not changed, stressing the need for tight monetary policy in the interest of FX stability.
• Given the overwhelming consensus for the maintenance of the status quo, risks were skewed towards the dovish side headed into this meeting.

This month’s policy statement retained a cautious tone, reiterating that a “careful and patient” approach to monetary policy remains necessary – guidance which was identical to that offered in October, and indeed for the entirety of the year. The central bank notes that mandatory and voluntary price restriction measures have had a significant inflation-reducing effect, although high annual price pressures were still observed for metrics outside of the scope of these measures. Forint strength since the beginning of the year was noted, with officials increasingly seeing its favourable effects on purchase prices.

The Bank forecast that with price margin restrictions measures extended and their scope widened, the rate of price increases will decline into the tolerance band by the end of 2025 and temporarily decrease at the beginning of 2026. This provided the most notable change as previously, the NBH expected the inflation to fall only “in early 2026.”