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Tag: MNB

Átlátszó: Central Bank Governor’s Son Travels on Diplomatic Passport

The son of the governor of the Hungarian National Bank (MNB) has a diplomatic passport, reports investigative outlet Átlátszó. Back in May, the newspaper made a request for public information from the Ministry of Foreign Affairs, asking whether Ádám Matolcsy, son of MNB Governor György Matolcsy, and two others used diplomatic documents.

Citing the state of emergency, the ministry only responded on July 4, acknowledging that out of the three people Átlátszó asked about, only Ádám Matolcsy had a diplomatic passport.

The Foreign Ministry quoted the following legislation as justification:

A diplomatic passport may be issued to a person who travels abroad on a diplomatic mission on behalf of the President of the Republic, the Prime Minister, the Speaker of the National Assembly, or the minister responsible for foreign policy valid only for the duration of the trip, as well as a person provided a passport in exceptionally-justified cases by the minister responsible for foreign policy at the recommendation of the supervising minister.

However, it is unclear why Foreign Minister Péter Szijjártó provided a diplomatic passport to Ádám Matolcsy.

In March, news site 444 wrote that Ádám Matolcsy and his friends were very fond of “luxury cars, expensive watches, private aircraft, and public money.” [444]

Son of Central Bank Governor Lived in Mansion Bought by National Bank as “Research Center”

picture of Ákos Hadházy

Ádám, the son of [National Bank Governor] György Matolcsy, lives in a 1.3 billion (!) forint palace, which the National Bank’s foundation bought to use as a ‘research center.’

-writes independent MP Ákos Hadházy on social media about his latest find.

The opposition politician based his comments on photos that Ádám Matolcsy’s new wife herself put up on social media, which Hadházy also posted. He commented that, “a photo with the caption ‘home sweet home’ was taken in a room that is identifiable from the outside by its distinctive, unique windows.”

According to Hadházy:

The luxury villa was bought by the National Bank’s foundation from your money in 2015 (mostly from the gigantic profit made when foreign exchange reserves were converted into forints).

He adds that the building was purchased in 2015 for 1.3 billion Ft. (US $4.13 million) by the Hungarian National Bank’s Pallas Athéné Geopolitical Foundation. Hungary’s central bank is headed by György Matolcsy.

The independent MP notes that the house was “sold a few years later and now belongs to a private equity fund called Felis, a friend of Ádám Matolcsy on paper.” But as Hadházy states, “István Száraz could easily buy the property if he wanted to, since his company regularly receives billions in contracts from the National Bank for communication-related work.”

Following Ákos Hadházy’s revelation, Ádám Matolcsy told RTL News that he was not currently living in the property, but admitted that he had previously lived there and would not rule out living there again.

[Magyar Hang, RTL][Photo: Ákos Hadházy / Facebook]

Karácsony to Matolcsy: Let’s break up MNB, not Budapest

picture of Gergely Karácsony

Budapest Mayor Gergely Karácsony (pictured) is apparently not a fan of a recent proposal by György Matolcsy, the Governor of the Hungarian National Bank (MNB), on how he envisions the future of the nation’s capital.

On Monday, Matolcsy stated in Magyar Nemzet that the capital could develop properly if the city’s current districts broke off and Budapest was “shaped into a healthy size” of about 600,000 inhabitants. The MNB Governor would preserve the “Budapest city core,” essentially maintaining all the leading institutions of the state, government, business, banking system, higher education, and culture, but spinning off the capital’s outer districts into their own independent cities.

Following György “Chopper” Matolcsy’s proposal to split up Budapest, I have an idea. Let’s break up the Hungarian National Bank. One half will finally deal with the inflation that has been hitting decade-long highs. The other, where hundreds of billions of forints of public money have “lost their character” as public money in recent years, should be placed under the supervision of the Prosecutor General’s Office.

-Gergely Karácsony reacted on Facebook to György Matolcsy’s suggestion.


Forint falls after MNB raises key interest rate

picture of Ferenc Deák

The Hungarian National Bank (MNB) raised the base interest rate 0.3%, from 1.8% to 2.1%, to take effect on Wednesday, writes

Most analysts expected some monetary tightening, but there were also some who saw a need for an increase of up to 1 percentage point due to higher inflation. The average inflation rate jumped to 6.5% in October, with even higher rates likely in November-December.

With inflation so high and interest rates low, it is no surprise that the Hungarian forint has hovered at near-historical lows recently, says the business news site.

Money markets were subsequently disappointed in MNB’s 0.3% increase, as analysts had planned on a somewhat higher hike in the base interest rate.

Following the Central Bank’s decision on Tuesday, the forint quickly fell from 364 to 366.8 against the Euro, close to its historical low of 369.8 Ft. Against the dollar, the Hungarian currency was pegged at 322.5 Ft.


Matolcsy sees warning signs for Hungarian economy

picture of György Matolcsy

“The epidemic struck suddenly, and the economy and life came to a sudden halt. However, the recovery is similarly fast, not in all things and not everywhere, but compared to crises over the last 100 years, this recovery has now been the fastest,” the head of the Hungarian National Bank (MNB) wrote in his latest analysis published on Magyar Nemzet.

On the one hand, György Matolcsy pointed out that the Hungarian economy had restored its 2019 pre-coronavirus GDP level by the middle of 2021, making it one of the 10 best-performing economies in the EU.

At the same time, the central bank governor says the opposite case is true in terms of rebalancing compared to restoring growth. The crisis, and after that the crisis management and now the recovery, is being accompanied by a rapid and significant deterioration of these balances. Not one single equilibrium indicator is deteriorating, but all of them at once.

Matolcsy also elaborated on how Hungary’s budget deficit could be around 8% of GDP in 2020-21, and by 2022 the country could catch up to Italy and Romania, the two countries with the highest deficits in the EU.

Public debt is hovering around 80% of GDP, and next year’s high deficit target does not forebode a perceptible reduction in this rate, argues the MNB Governor. Along with these processes will be higher inflation, which is mainly due to global economic developments but is undoubtedly also affected by high domestic budget deficits as well as higher income outflows from improvements in productivity and competitiveness.

Governor Matolcsy wrote that since the outbreak of the coronavirus-induced crisis, the Hungarian economy situation has been deteriorating, both in absolute terms and in terms of its relative position. Although this has occurred in all countries affected by the crisis, in most cases there has been a gradual improvement in many of their indicators since that time.

However, the situation in Hungary has been gradually deteriorating for more than a year, and its deterioration in terms of the country’s financial vulnerability is already perceptible in its external financial assessment.

György Matolcsy believes continuing all government measures that improve living standards, but that certain public investment projects which add to the deficit but do not improve competitiveness must be abandoned or postponed.

[Magyar Hang]

Central bank may spike interest rates to protect forint

picture of MNB logo

Inflation looks so worrisome to the Hungarian National Bank (MNB) that the central bank may have to raise interest rates by as much as 1 percentage point on Tuesday, according to analysts who spoke with Népszava.

The central bank’s base rate is currently 1.8%, but is expected to exceed 2.5% on Wednesday, and may even soon approach 3%.

No monetary tightening of this extent has been carried out since the financial crisis of 2008, when Hungary was close to bankruptcy. At that time, the central bank raised the rate 3 percentage points, from 8.5% to 11.5%.

András Vértes of GKI Economic Research Zrt. said that current problems are caused by inflation due to the coronavirus crisis. In such a situation, the MNB really cannot do anything else but raise rates, he said.

Financial market analysts also expect a strong interest rate hike if for no other reason than to stabilize the forint exchange rate. On Friday, the Hungarian forint hit an eight-month low against the dollar and the Euro.