FX.co ★ Hungary Holds Rates Steady to Curb Inflation Risks

The National Bank of Hungary maintained its benchmark interest rate at 6.50% for the ninth consecutive session in June, aligning with market predictions. The rates for overnight deposits and collateralized loans were also held steady at 5.5% and 7.5%, respectively. This decision underscores the central bank's commitment to anchoring inflation expectations and ensuring stability amid escalating geopolitical tensions. In May, headline inflation escalated to 4.4%, surpassing the central bank’s 3% target and exceeding its 1 percentage point tolerance band. Economic caution is likely to continue, as Economy Minister Marton Nagy has cautioned that the US bombing of Iranian nuclear sites could elevate inflationary pressures by increasing transit costs and constricting energy supply.