Future president of Hungary’s National Bank reveals key objectives and his team 🔄

The primary goal of Hungary’s National Bank is achieving and maintaining price stability; it is committed to its 3pc inflation target, Finance Minister Mihály Varga said on Monday before parliament’s economy committee as a candidate to lead the NBH.

The independence of the NBH is guaranteed by both the act on the Central Bank and the effective regulatory system of the European Union, he said. At the same time, he added that for sustainable development and a predictable economic environment, the central bank cooperates with the government and domestic and international organizations with mutual respect for their respective mandates.

Varga said that under his leadership the NBH will treat performing classic central bank responsibilities as priorities while activities outside of this will be moderated. At the meeting, Varga introduced his future central bank team members but did not disclose their expected positions. The team will include Péter Benő Banai, the state secretary for the budget, Government Debt Management Agency (AKK) head Zoltán Kurali, and state-owned Hungarian Development Bank (MFB) CEO Levente Sipos-Tompa. The committee supported the appointment of Varga as NBH Governor by a majority vote.

The committee supported the appointment of Varga as NBH Governor by a majority vote. The minister said his commitment to maintaining the 3pc inflation target is a clear and unambiguous message that helps anchor the expectations of consumers, businesses, and financial market participants. Speaking about the prospects of the Hungarian economy, Varga said the economy is on a strong foundation, inflation is within the target range of the central bank, the current account is expected this year to have a 2pc surplus compared to GDP.

The liquidity of households, companies, and the banking system is robust, and the financial system is stable. The basis for economic growth in 2025 is rising consumption, expanding retail lending, growing construction order stock, and new manufacturing capacities coming online. Monetary policy can best contribute to growth by maintaining persistently low inflation and financial market stability, he said. A stable exchange rate and financial markets are priorities for ensuring price stability. Stable and predictable exchange rate is needed for sustainable economic growth.

Varga said that under his leadership the NBH will give a decisive response to risks threatening the financial transmission system, financial stability and sustainable economic development. Varga said he will place strong emphasis on the management discipline of the central bank and ensuring that the central bank operates in a transparent and professional manner. Responding to questions regarding the central bank’s foundations and real estate assets, Varga said that the situation will be reviewed after he takes office in March.

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