National Bank of Hungary
Photo: DNH

Budapest, February 9 (MTI) – The head of the Hungarian Banking Association acknowledged the success of the central bank’s monetary policy over the past three years but said lenders would welcome an end to new initiatives in an interview published by daily Magyar Idők on Tuesday.

Mihály Patai gave a “positive” assessment of the National Bank of Hungary’s monetary policy under governor György Matolcsy, noting that the base rate had been reduced without a notable weakening of the forint, cheap credit had been made available to companies under the Funding for Growth Scheme and the country’s external vulnerability had been reduced with the introduction of three-month deposits to soak up liquidity as well as incentives for banks to buy government securities.

“What would serve the interest of the economy and the banking sector would be for no new monetary policy initiatives to be announced,” he added.

Asked what the money market expects of the government, Patai said “predictability”.

“[We expect] there to be no more creativity, no more measures without professional consultations, and that promises made to further reduce the bank levy are kept,” he said.

Commenting on the high rate of non-performing loans in Hungary, Patai said the problem was in part a social and growth matter, but added that Hungarian borrowers’ propensity to repay their debt is much lower than that of their neighbours.

“Hungarians’ payment morale is four times worse than Serbians’, five times worse than Romanians and six times worse than their Slovak counterparts for the same lending products,” he said.


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