Hungarian National Bank head, appointed under Orbán, pledges cooperation with Tisza cabinet – interview

Mihály Varga, president of the Hungarian National Bank (MNB) and a senior figure appointed under Viktor Orbán’s government, says he is aiming for “good working relations” with Hungary’s new Tisza-led cabinet, while insisting the central bank’s priority remains price stability. In an interview with HVG, he also outlined plans to boost transparency around private equity funds, tighten the MNB’s focus on core tasks and avoid losses on the rescheduling of 4iG bonds.

Varga argued that April’s market moves — a stronger forint, lower government bond yields and a rising stock market — create an opportunity, but are not in themselves a guarantee of lasting stability. The MNB’s primary mandate remains price stability, and it does not pursue a formal exchange-rate target, he said, while acknowledging that a stronger forint can help curb inflation.

From Orbán minister to central bank chief under a new political reality

Mihály Varga served as a minister in Viktor Orbán’s first government, and later returned to cabinet where he spent more than 11 years as a minister in Orbán-led administrations before moving to the Hungarian National Bank.

Since then, Hungary’s political landscape has shifted sharply, with the Tisza Party now holding a two-thirds parliamentary majority. Against that backdrop, Varga’s pledge to seek “good working relations” with the new cabinet raises a key question for markets: how closely the central bank’s priorities will align with the government’s economic agenda, and where the MNB will draw a firm line to protect its independence.

Hungarian National Bank: markets want fiscal credibility, not just sentiment

Varga said the key to a durable reduction in Hungary’s longer-term risk premium lies mainly with the government: markets will look for a credible budget path, a lower deficit and a declining debt trajectory. In remarks also highlighted by business reporting that cited the HVG interview, he suggested investors will want clearer, medium-term fiscal plans by autumn, as the initial “grace period” in market sentiment could fade.

He also addressed inflation risks: while inflation has recently eased, he indicated that second-round effects from higher energy costs could push inflation back above 5% later in 2026, underlining why the central bank is prioritising credibility and tight operational discipline.

Private equity fund ownership to become more visible from July 2026

One of the most politically sensitive issues in the interview was transparency in Hungary’s private equity fund sector, which critics have long described as a channel for opaque ownership.

Varga confirmed that following amendments to Hungary’s anti-money laundering framework, closed-end investment funds and their fund managers must disclose their beneficial owners. From July 2026, these data are expected to become accessible to the public.

However, he cautioned against expecting dramatic revelations, arguing that authorities already had visibility over the key information. In a pointed aside, he added that the media had often already identified the likely beneficial owners with reasonable accuracy. He also noted that additional changes may be required from 2027, aligning Hungary’s system with evolving EU anti-money laundering rules.

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4iG bond rescheduling: MNB “will not take a loss”

Varga also addressed the rescheduling of 4iG bonds issued under the MNB’s corporate bond scheme. He said 4iG participated in the programme in a compliant manner and that when the company requested amended terms, the central bank made it clear it would not accept a loss.

The rescheduling was approved only with a higher interest burden for the issuer, he said. Varga added that most participating companies are servicing their obligations properly, and where credit rating agencies flag problems, issuers have a limited period to resolve them — otherwise, a buyback obligation can be triggered under the programme’s rules.

Matolcsy-era spending under investigation as MNB retreats to core tasks

On ongoing scrutiny of the central bank’s past activities, Varga said the MNB provided documents to Hungary’s National Bureau of Investigation following reports by the State Audit Office, and that the central bank’s leadership previously filed a criminal complaint on suspicion of offences including breach of fiduciary duty and fraud-related allegations. The focus includes property developments and foundation spending launched during the Matolcsy era, he said, with the matter now in the hands of the justice system.

Varga emphasised that the new leadership’s aim is not to “collapse” foundation assets, but to minimise losses and preserve what can be saved. He said that over the past year, measures reduced the shortfall by more than HUF 100 billion (about EUR 274 million, using ~365 HUF/EUR).

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Slimmer balance sheet, no new growth schemes, asset sales and staff cuts

Varga said the Hungarian National Bank is returning to its core mandate and scaling back non-essential activities. He listed several concrete steps:

• reducing the central bank’s balance sheet
• launching no new subsidised growth lending or bond programmes
• selling surplus real estate not needed for core operations
• transferring artworks to museums
• cutting staffing levels significantly — cited in reporting as a 15% reduction, leaving headcount around 1,500

Varga argued these moves are essential to restoring the MNB’s credibility and ensuring monetary policy is again tightly focused on price stability.

Why this matters

For investors and households alike, the message is that April’s improved sentiment is only a starting point. The MNB is signalling a stricter, credibility-first approach, while Hungary’s wider financial outlook still hinges on whether policy steps — especially fiscal plans and transparency reforms — match the market’s initial optimism.

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