Banking association head notes success of MNB’s monetary policy

MNB

Image by Jessica Fejos

Mihály Patai, the head of the Hungarian Banking Association, acknowledged the success of the National Bank of Hungary’s monetary policy over the last three years, however, he said that lenders would welcome an end to new initiatives, in an interview published by Hungarian daily Magyar Idők.

In the interview, the association head gave a “positive” assessment of the central bank’s monetary policy under the governance of György Matolcsy, and noted that the Monetary Policy Council was able to reduce the base rate of the bank without the forint weakening notably as a result.

Patai acknowledged the success of the central bankʼs monetary policy over the past three years but said lenders would welcome an end to new initiatives, according to the daily. Patai also commented positively on cheap credit made available by the MNB to companies in the framework of the Funding for Growth Scheme (FGS) and on the reduction of the countryʼs external vulnerability through the introduction of three-month deposits to absorb liquidity as well as incentives for banks to buy government securities, the daily reported.

“What would serve the interest of the economy and the banking sector would be for no new monetary policy initiatives to be announced,” Hungarian news agency MTI reported, citing the daily. On behalf of the money market, the head said that he does not anticipate any more creativity, nor measures carried out without professional consultations, and that any promises made to reduce the bank levy should be kept, MTI reported.

In connection with the countryʼs high rate of non-performing loans, the head reportedly said the issue is partly social in nature but also, in part, a matter of growth. He also said that the willingness of Hungarians to pay back their debts is far worse than in neighbouring countries, and that this is a complex phenomenon, rooted in historical, political and legal issues. He said no matter how complex the issue is, it needs to be solved, MTI added.

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