MNB extends BGS to public undertakings
Image by Jessica Fejos
National Bank of Hungary (MNB) policymakers decided at a meeting on Tuesday to extend the central bank's Bond Funding for Growth Scheme (BGS) to securities issued by non-financial public undertakings, but only on the secondary market, according to a report by state news wire MTI.
The measure, similar to the practice of the European Central Bank's asset purchase program, will take effect from March 16, 2021.
MNB will be limited to buying up to half of the issue of any public undertaking, while its exposure to any single undertaking will be limited to HUF 70 billion.
The central bank launched the BGS in the summer of 2019 to beef up Hungary's relatively small corporate bond market. By the end of February 2021, 48 companies had issued HUF 910 billion of bonds in the framework of the program, more than tripling the scale of the local corporate bond market.
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