Big change: 50,000-forint notes to be introduced? Central bank governor answers
Előd Novák, a politician of the far-right Mi Hazánk Mozgalom (Our Homeland Movement), asked the Governor of the Central Bank of Hungary when a 50,000-forint banknote would be introduced and the 5-forint coins withdrawn in the country. Here is the governor’s answer.
Just last week, we reported on the Mi Hazánk initiative to ban Coca-Cola drinks from the Hungarian Parliament because he feels that public money should not be spent buying the products of a company that “supports the LGBTQ+ lobby”.
This time, the representative of Mi Hazánk asked Central Bank Governor György Matolcsy about the future of the Hungarian forint, index.hu writes.
When are they willing to withdraw the inflated 5-forint notes and introduce the 50,000-forint ones?,
Novák wanted to know.
György Matolcsy’s written response was published on Friday. In it, he highlighted that since the central bank found no disturbances or conditions requiring its intervention in the currency circulation cycle, it will not withdraw or introduce any new currencies.
The 50,000-forint banknote is not coming any time soon, it seems.
“The central bank determines the denomination composition of banknotes and coins in circulation on the basis of complex criteria that take into account the operation of all actors in the cash supply chain, in which special weight is given to the analysis of retail payment methods and the examination of the role of individual means of payment in circulation,” Matolcsy wrote in his reply.
When will a 50,000-forint banknote be available in Hungary?
Portfolio highlighted seven main points from Matolcsy’s answer that justify why new banknotes are not being introduced.
These are the following regarding the withdrawal of the 5-forint coins:
- although inflation has an effect on the purchase value of individual denominations, it has had a negligible effect on the population’s payment habits in the last two years;
- the share of individual coin denominations in circulation has been stable for more than a decade;
- the definition or change of the denomination structure affecting the whole of society cannot be based on a narrow analysis of the current value of metal prices, as their volatility is high.
The governor of the national bank explained the following regarding the introduction of the 50,000-forint banknote:
- according to data from the National Tax and Customs Administration of Hungary, in 2023, there were 2.23 billion cash payment transactions completed, the average value of which was only HUF 3,597;
- large-value payments are usually not paid in cash, and the Instant Payment system available for these transactions provides a fast and reliable platform for people;
- accordingly, the use of cash is common for lower-value transactions, which does not justify the introduction of new, high-value denominations.
- And finally, in 2023, the amount of HUF 20,000 banknotes in circulation decreased by 0.7%. Only the amount of 500 and 1,000-forint notes circulated increased significantly, by 5.1% and 5.8%, respectively. Inflation, therefore, heightened the demand for lower-value denominations, not increasing the demand for higher-value banknotes.
As we summarised HERE, the last major changes the Hungarian currency saw were in 2008 and 2009, when the National Bank of Hungary decided to withdraw the 1- and 2-forint coins from circulation, as their production cost was higher than their value. Furthermore, since 2009, 200-forint banknotes have been changed to become coins, as well.
Read also:
- What is happening here? Hungary’s budget deficit almost reached its full-year target by the end of March – Read HERE
- Fiscal slippage: Rating agency issues warning to Hungary – HERE
Source: Index, Portfolio
What will be of Interest, besides the response of the Governor of the Central Bank of Hungary – noted in this article, the position that of the Minister of Finance – Mihaly Varga, a somewhat “headless chook” behaviour like a panic – stricken, in an un-thinking confused bewildered manner, that is, as we know, of the current Prime Minister of Hungary – Victor Orban, the pressurization mounting on him, at this erroneous point in time of the “crumbling” Hungarian Economy, what will Varga say as a response ?
Varga, over (4) four months past, responded to questions on the “Going” of Euro in Hungary, which he left “passively” opened, in his response, that he as Finance Minister of (8) eight years in the Orban Fidesz-Government, with a “Dubious” record or Curriculum Vitae, that does not have a Good Read of achievements, in fact, of greater failures in the Management of the Finances of Hungary, than positives, what’s Varga’s “crystal ball” – in this 50,000 forint note introduction ???
FACTUALLY, sooner than later, there is increased BAD News going to be announced in relation to the state of the Hungarian Economy, and we must be MINDFUL, the response that comes out of the “mouths” of the Prime Minister and the Finance Minister knowing there DNA practice in the use of PROPAGANDA.