"As the MNB has signaled on a number of occasions, the central bank can operate credibly and effectively even with temporary negative equity, in line with international practices," the central bank said.
The MNB noted that it had reviewed the best European practices for managing the problem of negative equity together with the government in recent months.
Legislation in force at present requires the government to cover any difference between the central bank's net assets and statutory share capital in equal payments over five years.
The government signaled its intent to amend the legislation after the MNB estimated its mandatory recapitalization, following expected losses due to economic stimulus and measures to bring down inflation, posed a risk to the 2024 budget equivalent to 0.4%-0.5% of GDP.
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