Hungary Holds Key Rate Steady Amid Global Headwinds

Hungary's central bank kept its key rate steady at 5.5% after three straight cuts, matching every one of the 24 Bloomberg-surveyed economists and was largely anticipated amid higher oil prices, the US-Iran war, and tighter Fed and ECB policy.

Officials are weighing a cut in the 3% inflation target to 2.5%, potentially this month, ahead of what is expected to be a formal unveiling by Prime Minister Peter Magyar's government of its plan to adopt the euro.

After three reductions in a row, the National Bank of Hungary left borrowing costs unchanged at 5.5% on Tuesday, with Governor Mihaly Varga set to brief reporters at 3 p.m. in Budapest, alongside a statement and new projections for inflation and economic growth.