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Apr 07, 2020

Coronavirus Update: NBH Governor announces new measures to protect the economy

György Matolcsy, Governor of the National Bank of Hungary (NBH), today announced new monetary measures focused on supporting the protection of the economy.

György Matolcsy, Governor of the National Bank of Hungary (NBH), today announced new monetary measures focused on supporting the protection of the economy.

“We have had great success over the last seven years, but this has not absolved us of the danger from a new attack,” György Matolcsy said today during an NBH press conference. “We are in the situation where our successful economic results are in danger, the virus is attacking Hungary, the government, the functioning of the state, and families.”

In addition to the five-point economy protection plan launched by Prime Minister Viktor Orbán yesterday, the governor has also introduced a series of measures aiming to strengthen the financial system, and to get Hungary back on track.

Matolcsy launched the reintroduction of the Growth Loan Program (NHP), under the name of Go, NHP (NHP Hajrá) providing another HUF 1,000 billion for SMEs.

The National Bank has also made changes to the Growth Bond Program, where the NBH 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 the MNB's participation may increase to HUF 50 billion in an issue instead of HUF 20 billion.

Matolcsy added that the MNB will pay a dividend of HUF 250 billion to the budget, mainly due to the fact that a profit of HUF 137 billion was achieved through the gold reserve.

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

And finally, Governor Matolcsy announced that “the liquidity of the banking system was improved upon by HUF 1,500 billion, which mainly supports government bond issues.”

“In total, the Monetary Council provided HUF 3,000 billion in new resources to the economy, which is six percent of this year's expected GDP,” Matolcsy concluded.

A call center set up for advice on the coronavirus can be reached on +36-80-277-455 and +36-80-277-456 or by email koronavirus@bm.gov.hu