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Apr 07, 2020 - Zoltán Kovács

National Bank of Hungary Governor: “We have had great success over the last seven years, but this does not save us from the danger of a new attack”

György Matolcsy, governor of the National Bank of Hungary (MNB), announced new monetary measures focused on supporting the protection of Hungary’s economy.

“We have had great success over the last seven years, but this does not save us from the danger of a new attack,” György Matolcsy began his remarks at the MNB press conference today. He added that “we are in a situation where these results are in danger; the virus is attacking Hungary, the government, the functioning of the state, and families.”

Discussing the five new economy protection programs launched by Prime Minister Viktor Orbán yesterday, the governor introduced a series of measures aimed at strengthening the financial system and getting Hungary back on track.

Matolcsy launched the restart of the Growth Loan Program (Növekedési Hitelprogram, or NHP) under the name of Go, NHP! (NHP Hajrá!), which will provide another HUF 1.0 trillion for SMEs.

The National Bank of Hungary is also making changes to its Growth Bond Program in which the MNB buys high-quality bonds issued by non-financial Hungarian corporations. In the future, the term of these bonds will be 20 years instead of 10, and MNB's participation per issue can be up to HUF 50 billion instead of HUF 20 billion.

Matolcsy also added that “the MNB is paying a dividend of HUF 250 billion to the budget, mainly due to a profit of HUF 137 billion achieved on its gold reserves.”

The Monetary Council today also confirmed its decision to reduce banks' required reserves to zero, freeing up HUF 250 billion in liquidity.

Finally, Governor Matolcsy announced that “the liquidity of the banking system has been improved by HUF 1.5 trillion, primarily in an attempt to support government bond issues.”

“In total, the Monetary Council has provided HUF 3.0 trillion in new resources to the economy, which is 6 percent of this year's expected GDP,” Matolcsy concluded.