Hungarian Prime Minister Viktor Orban's ruling Fidesz party plans to nominate former rate-setter Andrea Mager to succeed outgoing policymaker Gyula Pleschinger from next month, according to three sources familiar with the plan. The nomination will be considered by Parliament's Economic Affairs Committee during the upcoming parliamentary session.
The National Bank of Hungary (NBH) is anticipated to maintain its base rate at 6.5%, the European Union's joint-highest level, during the last meeting chaired by outgoing Governor Gyorgy Matolcsy due to increased inflation at the beginning of the year.
Orban, who has been in power since 2010, recently nominated former Finance Minister Mihaly Varga as Hungary's next central bank governor to bolster the economy after a period of stagnation.
Goldman Sachs economists noted that the policy outlook in Hungary is uncertain as Matolcsy steps down and Varga assumes his role, potentially affecting the bank's reaction to economic conditions.
The Monetary Council, under pressure from Orban's government to lower interest rates, is set for changes as the mandates of Pleschinger and two deputy governors expire by October.
Although market concerns persist about potential rate cuts by an Orban-aligned council ahead of the 2026 national election, Pleschinger cautioned against this due to increasing inflation this year. Economists polled by Reuters have reduced expectations for rate easing by the end of 2025.
Mager, the current head of Hungary's state-owned gambling organization, served as a rate-setter from 2011 to 2016, overseeing interest rate adjustments based on economic conditions. She has also held various key positions in the Hungarian government under Orban's administration.