ING analysts Frantisek Taborsky and Zolt\u00e1n Homolya project that the Magyar Nemzeti Bank will keep its base rate at 6.25% through 2026. They link this to geopolitical uncertainty, higher energy prices and Hungary\u2019s vulnerabilities, and they expect a hawkish, wait-and-see approach.<\/p>\n
They state that a rate cut is not expected in April. They also say the central bank may use firm communication aimed at foreign exchange stability, with attention on EUR\/HUF levels.<\/p>\n
They forecast inflation will keep rising over the rest of the year. They expect inflation to average 3.5% in the second quarter, move above the tolerance band in the second half of the year, and average 4.3% in the final quarter.<\/p>\n
They add that, under their baseline view, they do not see a scenario for a rate cut this year while energy prices stay higher. They also outline a worst-case path where inflation exceeds 6% in the third quarter, which they say could lead to rate rises.<\/p>\n
Given the expectation that Hungary’s central bank will keep its base rate at 6.25% for the remainder of the year, traders should reconsider any positions betting on monetary easing. The forward rate agreements market is still pricing in at least a 25 basis point cut by year-end, which creates a clear discrepancy with this hawkish outlook. This suggests opportunities in paying the fixed rate on Hungarian forint interest rate swaps, anticipating that short-term rates will remain higher for longer than the market currently expects.<\/p>\n
The primary driver for this policy is persistent inflation fueled by high energy costs, with Brent crude oil prices holding around $95 per barrel this month. We saw this pressure in the latest March 2026 inflation data, which showed a headline reading of 3.7%, confirming an accelerating trend. As we project inflation to average 4.3% in the final quarter, traders can use inflation swaps to position for consumer prices rising above the official tolerance band later this year.<\/p>\n
For the foreign exchange market, the central bank\u2019s desire for stability suggests the EUR\/HUF pair will face significant resistance above the 390 level. The forint has strengthened considerably from the weaker levels we saw during the energy price shocks of late 2025, and the MNB will use its hawkish tone to keep it that way. Therefore, selling call options on EUR\/HUF with strikes above that level could be a viable strategy to collect premium from the expected range-bound trading.<\/p>\n
However, there is a significant tail risk of an emergency rate hike if inflation were to spike above 6% due to a geopolitical shock. This makes the current environment of low realized volatility potentially deceptive, as the central bank is actively suppressing price swings. Traders could consider buying cheap, out-of-the-money options on either interest rates or the EUR\/HUF as a hedge against a sudden, sharp policy reversal.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" ING expects Hungary\u2019s central bank to hold 6.25% through 2026 as inflation rises, risks persist.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45838","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45838"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45838\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}