Matolcsy outlines amendments to Central Bank Act made on ECB recommendations

National Economy Minister Gyorgy Matolcsy outlined amendments to Hungary’s new Central Bank Act in a letter to European Central Bank president Mario Draghi dated January 5.

A copy of the letter sent by the National Economy Ministry to MTI shows Mr Matolcsy pointed out that lawmakers had taken steps on the ECB’s recommendation such as removing an obligation for the National Bank of Hungary executive board to submit its agenda to the government and inserting an explicit prohibition on any government instruction to the central bank or its decision makers.

"The intention of the Government with the new Act is to create a stable basis for the central banking within the new constitutional framework," Mr Matolcsy said.

Commenting on a decision by lawmakers to keep part of the act that allows an increase in the number of the MNB’s rate-setters and deputy-governors, in spite of concerns voiced by the ECB, Mr Matolcsy said the possibility "provides greater flexibility, should the extension of the [MNB’s] tasks warrant for this".

"I am fully convinced that the [Central Bank Act]...is fully compatible with the EU-legislation," he added.

The new Central Bank Act, made necessary because of the new Constitution, in force from January 1, 2012, was approved by Parliament during its last session of 2011, on December 30.