He emphasized that Hungary had not lost the decade, “there is a good chance, the last traces of the crisis must continue to disappear”. Unity is the area where the country has the largest reserves, but more steps need to be taken to improve it. The central bank has previously indicated the need for a change in 330 points, he said. Deputies adopted a proposal for a resolution on the central bank’s 2020 accounts, 9 against 4 against.
György Matolcsy emphasized that last year Hungary had to face a complex crisis full of consequences caused by the coronavirus epidemic. He had to stand on several fronts at the same time. Above all, the biggest public health challenge of the last decades had to be addressed, so the most important task was to preserve and save human lives. The economic virus also had to be fought with the effects of the crown, so that the epidemic would not destroy the results achieved in the last decade, nor would it hinder Hungary’s catching up, he listed.
He stated that from the first moment of the emergency, everything was done to help preserve the stability of the Hungarian economy, preserve jobs and establish the post-crisis recovery by using the available resources and means.
Last year ended the best Hungarian economic decade of 1920, this successful catching – up process was “caught” after the complex crisis caused by the epidemic, he explained. Last spring, the central bank launched a crisis management program so that the phenomena of the crisis would not spill over into other areas, he said, and said that the Hungarian central bank, like the central banks of the world, had successfully solved the task by means. Of these, György Matolcsy highlighted the elaboration of the moratorium on loan repayment, which was one of the most effective tools in the EU and in the world, and lasted the longest in Hungary.
The financial system did not show a crisis, the Hungarian crisis management tools, the use of central bank programs, households increased 14 loans, and 9 broader companies as well. After the moratorium, the Growth Loan Program (Nhp) was relaunched, and about HUF 3 trillion was allocated to the economy, micro, small and medium-sized enterprises. This was spent on investments, loan replacement, and almost half on working capital loans, including wage payments. The central bank boosted lending by 15-15 basis points in June and July 2020, he said.
Thus, the Hungarian crisis management was better than the average, according to the central bank governor, who also drew attention to the fact that the country is at the forefront of the new ranking. It recommends all actors for crisis management, including the government, the central bank and banks.
He emphasized that the central bank has been operating profitably since 2013, and in 2020 the MNB generated HUF 255.4 billion more than the previous year’s profit, two-thirds of which is based on exchange rate gains. The net interest and interest-like result was a profit of HUF 40.7 billion, HUF 8.7 billion lower than the profit in 2019. The central bank’s primary goal of achieving and maintaining price stability was successfully met in 2020 as well. He reiterated the question: the central bank has neither a profit nor an exchange rate target.
The MNB’s balance sheet has risen perhaps the largest in the EU, but there is a significant difference within that it uses all its assets in a targeted way, he said. Its targeted nature is well illustrated by the MNB’s “green mandate”, he added. He called green thinking essential to a sustainable growth path. As part of the central bank’s Green Program launched in 2019, further action was taken in 2020 to reduce risks related to climate change and other environmental problems and to expand green financial services in Hungary, the Green Home Program and the Green Mortgage Bond Program were launched.
According to the MNB’s report, its equity on 31 December 2020 was HUF 1,112.7 billion. Based on the decision of the Board of Directors, the MNB paid a dividend of HUF 250 billion from its profit reserve to the central budget in 2020. The level of Hungary’s international reserves (foreign exchange reserves) increased by almost 5.3 billion euros in 2020, amounting to 33.7 billion euros at the end of the year.
Cover image: Getty Images