The Hungarian National Bank (MNB), focused on fulfilling its core responsibilities, has operated successfully over the past year, central bank governor Mihály Varga said on Thursday in a podcast.
According to the MNB governor, the strengthening of the forint, declining inflation and growing foreign exchange reserves all demonstrate that the change in direction was the right decision, as was ending unnecessary activities.
Monetary policy played a significant role in achieving price stability, contributing to the preservation of the value of incomes. Lower interest rates may support growth, while stability benefits economic actors, therefore the forint should remain within a predictable range.
The MNB still has no exchange rate target and, in order to maintain favourable trends, switched to data-driven decision-making at the end of 2025, the central bank governor summarised.
Mihály Varga stressed that central bank independence remains a fundamental precondition for successful operation.
He said he sees “alignment” with Finance Minister András Kármán on key issues and expects “favourable economic policy coordination” in the coming period. He also added that he is open to meeting Prime Minister Péter Magyar.
Regarding the introduction of the euro, the central bank governor said the 2030 target date is “ambitious”, but fulfilling the conditions in itself is beneficial for the economy, and if the government remains committed to adopting the EU currency, it can count on the MNB during the process leading to its introduction.
“Disputes are, of course, possible, as many different consequences must be taken into account, and it is also a question how global economic conditions will evolve.”
At the same time, he said it is a positive sign that developments in the government bond market are favourable, lending has recovered, the investment environment has improved, and Hungary can hope that international credit rating agencies will grant some leeway before their next assessment.
The head of the central bank also spoke optimistically about safeguarding foundation assets, noting that restructuring operations and contract terminations have so far resulted in savings exceeding HUF 100 billion.
He declined to comment on the possible criminal liability of his predecessor, György Matolcsy, in relation to foundation matters, but stated that the Pallas Athéné foundation, which had deviated from the central bank’s objectives, could cease to exist within a few years.
He also reported that the investigation into the refurbishment of the central bank headquarters had encountered a “jungle of contracts”, and the reasons for cost increases remain unclear. In the interest of transparency and fair accounting, the MNB is supporting the investigation by every means and will attempt to recover at least part of the money unjustifiably spent on the renovation.
Artificial intelligence was used for the translation of parts of the original Hungarian text.
