Hungary Keeps Rate Hopes Alive Amid Eurozone Push

The National Bank of Hungary has left its base rate at 5.5% and lowered its inflation target to 2.5%, linking further rate cuts to fiscal reforms and euro adoption progress.

Deputy Governor Zoltan Kurali said the central bank could still lower rates by the end of this year if incoming data support the move and the government presents a credible deficit-cutting plan linked to euro adoption.

Hungary is pushing for eurozone membership, with Deputy Governor Kurali stating that joining ERM-2 is possible as early as 2029, with the goal of adopting the euro by January 1, 2032, if Maastricht criteria are met by 2030.

The renewed push for euro adoption has led to a surge in foreign investment, with over $13 billion invested in Hungarian local bonds so far this year.