central bank
While the forint is already under pressure, the Hungarian National Bank (MNB) is increasingly vehemently defending its independence. A paper presented on Thursday accuses the government of a dozen measures of interfering in monetary policy.
The conflict between central bank president György Matolcsy and economics minister Márton Nagy is taking on increasingly bizarre features. After the MNB president recently used a gala to address personal accusations, the central bank presented a position paper on Thursday that lists eleven points on how the government has tried to influence monetary policy over the last two years. The list is as much regarding the interest rate freeze as it is regarding arbitrarily drawn caps on loan interest rates that were “imposed” on commercial banks by the Orbán government. There are “thought games” from the Minister of Economics to replace the BUBOR as the reference interest rate or to determine a new target interval for the MNB inflation policy. The pressure from communication to lower interest rates more quickly or to make the framework conditions for interest rate decisions artificially more negative is also chalked up to official economic policy as a deliberate act. These are all more or less blatant attempts to undermine the independence of the National Bank. The local currency is currently hovering around 395 HUF/EUR, the weakest exchange rate in a year.
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