Hungary’s central bank has no exchange rate cap, says deputy governor
Budapest March 25 (MTI) – Hungary’s central bank has no exchange rate cap, deputy governor Márton Nagy told business daily Vilaggazdasag on Friday, dismissing the notion that the bank would not let the forint-euro rate strengthen beyond 310.
The bank’s monetary policy requires a stable forint-euro exchange rate, however, Nagy told the paper.
Concerning Standard and Poor’s recent affirmation of Hungary’s ‘BB+/B’ long and short-term credit rating, the deputy governor criticised the agency’s method of taking into account political aspects in its analysis, namely the laws on the types of information state-owned financial institutions can restrict public access to.
Nagy told the paper that the central bank funded its foundations from its own profits. The foundations then invest those donations in government bonds. The bond yields channelled to the foundations’ various goals and paid back to the central bank once those goals are achieved, Nagy said.