Hungary's central bank keeps benchmark interest rate unchanged at 6.25%, all three key rates remain on hold

(1) On Tuesday, the Hungarian central bank announced that it would keep the benchmark interest rate unchanged at 6.25%. At the same time, the overnight deposit rate remains at 5.25%, and the mortgage loan rate stays at 7.25%. (2) With no adjustments to any of the three major rates, the central bank is indicating a wait-and-see approach after evaluating domestic inflation trends and external geopolitical risks. The Hungarian Forint exchange rate and inflation outlook will be key factors in determining the future path of interest rates. (3) From a market sentiment perspective, energy price fluctuations caused by Middle East conflicts have brought imported inflationary pressures to Central and Eastern European countries. The Hungarian central bank's decision to keep rates unchanged reflects confidence in its current policy stance while retaining flexibility to make adjustments if economic prospects become clearer. (4) Going forward, it will be important to monitor Hungary's inflation data, the performance of the Forint, and the spillover effects of the European Central Bank's monetary policy on the Hungarian central bank. If inflationary pressures remain high, there is a possibility that future meetings may see a renewed tightening of policy stance.