MNB unveils measures to mitigate pandemic impact, jump-start economy


Photo by Adriana Iacob/

The National Bank of Hungary (MNB) on Tuesday announced a package of measures to mitigate the impact of the coronavirus pandemic on the economy and establish the conditions for a jump-start, state news wire MTI reports.

Photo by Adriana Iacob/

The central bankʼs policy-making Monetary Council decided to launch a government security purchase program in the secondary market "to restore the stable liquidity position of the government securities market".

The Council also decided to relaunch its mortgage bond purchase program to improve the long-term supply of funding to the banking sector.

Details of the programs will be published later.

No crowd-out target for Q2

The Council decided it will not set a target amount of banking sector liquidity to be crowded out of instruments bearing the central bank base rate from the second quarter.

"By changing its policy instruments, the [MNB] has increased its room for monetary policy maneuver, so as to be able to address money market challenges in a flexible and timely manner," the central bank said.

HUF 1.5 tln cheap financing for SMEs

The Council decided to make up to HUF 1.5 trillion of cheap and stable financing available to the SME sector in the framework of a program dubbed "Funding for Growth Scheme Go!" (FGS Go!) will launch on April 20 with an allocation of the HUF 1 tln. It will include HUF 500 billion that has not been drawn down under the MNBʼs earlier launched FGS fix program.

FGS Go! will operate with the same conditions as earlier FGS phases: the MNB will continue to provide refinancing loans to banks at 0%, and interest to be paid by SMEs will be capped at 2.5%.

Investments loans, including leases, will still be available, but the maximum maturity of refinancing loans will be set at 20 years in order to secure financing for protracted investment projects with a slower payback period.

Working capital loans will be available for a wide range of purposes with maturities up to three years.

The FGS Go! credit will be capped a HUF 20 bln per company. Banks will be required to evaluate loan applications within two weeks.

BGS exposure limit raised to HUF 50 bln

The Council decided to keep the cap on its Bond Funding for Growth Scheme (BGS), which aims to give a boost to Hungaryʼs corporate bond market, at HUF 450 bln, but raise the central bankʼs exposure to individual issuers from HUF 20 bln to HUF 50 bln. The limit on the maturity of bonds issued in the scheme will also rise from 10 years to 20 years.

In these challenging times, is committed to providing you with up-to-date and accurate information. We will post at least three coronavirus updates each day, including on weekends, at 10 a.m., noon and 5 p.m., or as close to then as developing events allow. Breaking news and other stories will be added throughout the day Monday-through-Friday.

Ministry Dismisses Suggestion That Hungary is 'Poorest' EU S... Figures

Ministry Dismisses Suggestion That Hungary is 'Poorest' EU S...

Economic Cooperation 'Firm Foundation' for German-Hungarian ... Int’l Relations

Economic Cooperation 'Firm Foundation' for German-Hungarian ...

Summer Season in Full Swing at Budapest Airport Transport

Summer Season in Full Swing at Budapest Airport

Sziget Tops Slingo Music Festival Ranking In Budapest

Sziget Tops Slingo Music Festival Ranking


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.