Hungary Cuts Inflation Target Amid Euro Entry Bid

Hungary's central bank has lowered its inflation target to 2.5% from 3%, starting in 2028, as part of efforts to join the euro zone.

The National Bank of Hungary stated that this shift will keep inflation anchored at lower levels and help satisfy the criteria for joining the euro.

Hungarian benchmark bonds have been in high demand among foreign investors, with $13.5 billion channeled into the local bond market in the year-to-date, according to Deutsche Bank.

The bank reported that dedicated investors are already heavily overweight Hungarian local bonds, while non-dedicated investors have yet to engage to the same degree.