"The MNB has become an uncontrolled state within a state, spending billions of public funding on luxury and disbursing public monies to friends and relatives as it sees fit," they said.Continue reading
The National Bank of Hungary (MNB) has closed 2021 with negative financial results for the first time since incumbent governor György Matolcsy’s take-over in 2013, and for the sixth time over the last 23 years, economic site Mfor reports.
According to MNB’s governor, the central bank in 2021 booked a loss of several hundred billion forints, which is definitely a significant reversal, considering the profits amounting to over HUF 250 billion (EUR 704 million) from the last two years.
According to the paper, it has remained under the radar that Matolcsy had warned beforehand that the combination of the central bank costs of the successful crisis management and rising central bank interest rates due to soaring inflation could eat up MNB’s previous profits. He had also said that this tendency could increase budget spending by hundreds of billions of forints a year.
The central bank’s profit, Mfor notes, is basically made up of three major items: interest income, currency exchange rates, and profit items on banking operations and applications.
When MNB generates a loss, it is the state budget that needs to finance it. On the other hand, MNB has paid hefty dividends to the budget on the back of its profits booked over the recent years, with amounts exceeding HUF 250 billion both in 2019 and 2020.
featured image via Szilárd Koszticsák/MTI