Hungarian Central Bank Considers Interest Rate Pause Amid Global Tensions

Hungarian central bank Deputy Governor Barnabas Virag indicated a potential pause in interest rate cuts. This comes as Middle East conflicts and a new U.S. rate outlook have weakened the forint currency. Recent developments since late September suggest a shift towards halting the rate cut cycle.

Hungarian central bank Deputy Governor Barnabas Virag signaled a possible halt in interest rate cuts, amid escalating geopolitical tensions in the Middle East and changes in U.S. rate perspectives, which have driven the forint to its lowest level in 18 months.

Virag, in an interview with Reuters, emphasized the influence of recent developments, particularly those since the end of September, on the central bank's policy direction. This shift could move decision-making towards pausing the rate cut cycle.

The statement reflects the bank's cautious approach in balancing domestic economic needs against external pressures, highlighting the complexities faced by policymakers in the current global financial landscape.

(With inputs from agencies.)