"If the Hungarian financial system had not functioned in the exemplary way that it had, Hungary's crisis management would have been one of the worst in the European Union," Matolcsy wrote.Continue reading
Perilous times are ahead for the global economy, which cannot simply resume where it left off before the pandemic, Prime Minister Viktor Orbán said on Tuesday.
Reserves are therefore a basic requirement, he told a press conference held together with György Matolcsy, the governor of the National Bank of Hungary (NBH), in Budapest.
After viewing gold reserves held by the central bank, Orbán said money’s value was underpinned by gold, the central bank and the government. He thanked Matolcsy for ensuring that the central bank guaranteed the country’s “reserves and security”.
The prime minister referred to changes in the gold markets in recent years, noting that the international practice of central banks’ purchasing and depositing gold had changed, too. An opinion seems to have emerged that even though liquidity on the markets is adequate and loans abundant, “there may come times when it is unsafe to rely on loans alone”. Orbán said the government, while observing the independence of the central bank, had also suggested “there should be more gold reserves deposited at home”.
Matolcsy noted that the central bank decided to increase Hungary’s gold reserves tenfold in 2018, following Orbán’s advice. Last year, another increase of 63 tons took place, with gold reserves now amounting to 94.5 tons. He said the moment when Hungary had its highest ever gold reserves was “quite extraordinary”.
In a global list of countries with the largest gold reserves, Hungary has jumped from 56th to 36th place, while it now has the third largest gold reserves in the region after Poland and Romania, he said. In per-capita terms, however, Hungary is first in the region with 0.31 ounces of gold for each resident, Matolcsy said.
“Gold is a matter of national and economic strategy, a line of defense; those that have gold owe nothing to anyone,” he said.
In the featured photo, gold bars from the gold reserves of the National Bank of Hungary, at NBH’s logistics center. Featured photo by Szilárd Koszticsák/MTI