The Hungarian National Bank ( hu, Magyar Nemzeti Bank (MNB)) is the

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...

Hungary Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia a ...

and as such part of the

European System of Central Banks The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...

(ESCB). The Hungarian National Bank was established in 1924 and succeeded the Royal Hungarian State Bank, which introduced the Hungarian forint on 1 August 1946. The Hungarian National Bank lays special emphasis on its international relations and on participation in the professional forums of international economic institutions and financial organisations (EU, IMF, OECD, BIS). Its principal aim is

price stability Price stability is a goal of monetary and fiscal policy aiming to support sustainable rates of economic activity. Policy is set to maintain a very low rate of inflation or deflation. For example, the European Central Bank (ECB) describes price s ...

, but it is also responsible for issuing the national currency, the

forint The forint (sign Ft; code HUF) is the currency of Hungary. It was formerly divided into 100 fillér, but fillér coins are no longer in circulation. The introduction of the forint on 1 August 1946 was a crucial step in the post-World War II stab ...

, controlling the money in circulation, setting the Central Bank base rate, publishing official exchange rates, and managing the

foreign-exchange reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...

and gold to influence

exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...

Operations

The Governor of the Hungarian National Bank is appointed by the

President of Hungary The president of Hungary, officially the president of the republicUnder the Constitution of Hungary, Basic Law, adopted in 2011, the official name of the state is simply Hungary; Before, the state was called the Republic of Hungary. However, t ...

at the proposal of the

Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...

for a six-year term. The most important decision-making body of the Hungarian National Bank is the Monetary Council. Its building is located in Liberty Square, in the

Inner City The term ''inner city'' has been used, especially in the United States, as a euphemism for majority-minority lower-income residential districts that often refer to rundown neighborhoods, in a downtown or city centre area. Sociologists some ...

Budapest Budapest (, ; ) is the capital and most populous city of Hungary. It is the ninth-largest city in the European Union by population within city limits and the second-largest city on the Danube river; the city has an estimated population ...

, next to the U.S. Embassy building. The MNB maintains a medium-term

inflation target In macroeconomics, inflation targeting is a monetary policy where a central bank follows an Forward guidance, explicit target for the inflation rate for the medium-term and announces this inflation target to the public. The assumption is that the ...

of around 3%. This is somewhat higher than the generally accepted level of

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...

for price stability in Europe, and it is used in order to allow for Hungary's "price catch-up" to the rest of Europe. Hungary's Central Bank Act states, "The primary objective of the MNB shall be to achieve and maintain price stability. Without prejudice to its primary objective, the MNB shall support the economic policy of the Government using the monetary policy instruments at its disposal". Demonetised or damaged currency can be exchanged in the bank's head office as well as its two regional offices.

Governors

* Sándor Popovics (1924–1935) *

Béla Imrédy Béla vitéz Imrédy de Ómoravicza ( hu, Vitéz ómoraviczai Imrédy Béla; 29 December 1891 in Budapest – 28 February 1946 in Budapest) was Prime Minister of Hungary from 1938 to 1939. Born in Budapest to a Catholic family, Imrédy studied ...

(1935–1938) * Lipót Baranyai (1938–1943) *

Gyula Pósch Gyula may refer to: * Gyula (title), Hungarian title of the 9th–10th century * Gyula (name), Hungarian male given name, derived from the title ; People * Gyula II, the ''gyula'' who was baptized in Constantinople around 950 * Gyula III, the ''g ...

(1943–1944) *

László Temesváry László () is a Hungarian male given name and surname after the King-Knight Saint Ladislaus I of Hungary (1077–1095). It derives from Ladislav, a variant of Vladislav. Other versions are Lessl or Laszly. The name has a history of being freque ...

(1944) *

Imre Oltványi Imre Oltványi (20 February 1893 – 13 January 1963) was a Hungarian politician, who served as Minister of Finance in 1945 in the Interim National Government. He studied at the University of Budapest. Between 1920 and 1921 he was the secretary ...

(1945) * Artúr Kárász (1945) *

(1945–1946) *

Ernő Csejkey Ernő or Erno is a Finnish and Hungarian masculine given name. Notable people with the name include: * Ernő Balogh (1897-1989), Hungarian pianist, composer, editor, and educator *Ernő Bánk (1883-1962), Hungarian painter and teacher * Ernő Bé ...

(1946–1949) *

Ferenc Jeszenszky Ferenc () is a given name of Hungarian origin. It is a cognate of Francis, Francisco, Francesco, François, Frank and Franz. People with the name include: * Ferenc Batthyány, Hungarian magnate and general * Ferenc Berényi, Hungarian artis ...

(1949–1952) *

János Vörös János Vörös (25 March 1891 – 23 July 1968) was a Hungarian military officer and politician, who served as Minister of Defence in the unofficial Interim National Government which led by Béla Miklós. He fought in the First World War at th ...

(1952–1955) *

László Háy László Háy (31 August 1891, in Jászberény – 27 January 1975, in Budapest) was a Hungarian economist, physician and politician, who served as Governor of the Hungarian National Bank during the Communist regime from 17 April to 20 November ...

(1956–1956) *

Dénes Szántó Dénes Szántó was a Hungarian economist, who served as Governor of the Hungarian National Bank after the Hungarian Revolution of 1956, from 20 November 1956 to 30 June 1960. See also *National Bank of Hungary The Hungarian National Bank ( ...

(1956–1960) *

Béla Sulyok Béla Sulyok (21 November 1904 – 1 March 1977) was a Hungarian economist. He served as Governor of the Hungarian National Bank during the Communist regime from 1 July 1960 to 31 October 1961. Sulyok became an official at the Hungarian General ...

(1960–1961) *

Andor László Dr. Andor László (24 December 1914 – 8 August 1993) was a Hungarian economist, who served as Governor of the Hungarian National Bank from 1 November 1961 to 10 July 1975. See also *National Bank of Hungary The Hungarian National Ba ...

(1961–1975) * Mátyás Tímár (1975–1988) * Ferenc Bartha (1988–1990) * Surányi György (1990–1991) *

Péter Ákos Bod Péter Ákos Bod (born 28 July 1951) is a Hungarian politician and economist, who served as Minister of Industry and Trade in the cabinet of József Antall from 1990 to 1991 then Governor of the Hungarian National Bank from 1991 to 1994, when ...

(1991–1994) * György Surányi (1995–2001) *

Zsigmond Járai Zsigmond Járai (born 29 December 1951) is a Hungarian politician, who served as Minister of Finance between 1998 and 2000. He was the President of the Budapest Stock Exchange between 1996 and 1998. After his ministership he was appointed Pres ...

(2001–2007) * András Simor (2007–2013) *

György Matolcsy György Matolcsy (born 18 July 1955, Budapest) is a Hungarian politician and economist, current governor of the Hungarian National Bank (MNB). He also served as Minister of Economy (2000–2002) during the first cabinet of Viktor Orbán and ...

(2013-Present)

History

In the

Austria-Hungary Austria-Hungary, often referred to as the Austro-Hungarian Empire,, the Dual Monarchy, or Austria, was a constitutional monarchy and great power in Central Europe between 1867 and 1918. It was formed with the Austro-Hungarian Compromise of ...

era the

Austro-Hungarian Bank The Austro-Hungarian Bank (german: Oesterreichisch-ungarische Bank, hu, Osztrák–Magyar Bank, cs, Rakousko-uherská banka, pl, Bank Austriacko-Węgierski, hr, Austro-Ugarska banka) was the central bank of the Habsburg Monarchy in the 19th a ...

was the central bank of the Monarchy, but after

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

, it was dissolved and the new Royal Hungarian State Bank was established. The first independent Hungarian central bank, the National Bank of Hungary, commenced operations on 24 June 1924, in the form of a company limited by shares. Hungary's Central Bank Act founded the Hungarian National Bank. Hungary 200 Forint coin 1992

The October 1991 Act on the National Bank of Hungary reinstated central bank

independence Independence is a condition of a person, nation, country, or state in which residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory. The opposite of independence is the statu ...

. The Act LVIII of 2001 on the Magyar Nemzeti Bank established the

Hungarian government The Government of Hungary ( hu, Magyarország Kormánya) exercises executive power in Hungary. It is led by the Prime Minister, and is composed of various ministers. It is the principal organ of public administration. The Prime Minister (''miniszt ...

and the MNB as the policy makers determining the

exchange-rate regime An exchange rate regime is a way a monetary authority of a country or currency union manages the currency about other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many ...

. Since 26 February 2008, the forint has floated freely against the euro. Hungary was supposed to join the eurozone in 2010, which would have resulted in the MNB losing control of monetary policy, but central bank leaders criticized this plan, saying that the fiscal austerity requirements would slow growth. In December 2011 two of the three major

credit rating agencies A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...

downgraded Hungarian long term currency debt to "junk status", due in part to changes to the

Constitution of Hungary The Fundamental Law of Hungary ( hu, Magyarország alaptörvénye), the country's constitution, was adopted by parliament on 18 April 2011, promulgated by the president a week later and entered into force on 1 January 2012. It is Hungary's first c ...

, creating doubts about the independence of the central bank. On 20 May 2016, Fitch Ratings upgraded Hungary's corresponding debt status to BBB- (which is investment grade), assigning a stable outlook to the rating. The upgrade was mainly motivated by, among other factors, high current account surpluses, high European Union (EU) fund inflows, banks' external deleveraging, the central bank's self-financing programme and foreign currency mortgage conversion reducing Hungary's external debt and financial vulnerability.

Hungarian National Bank's building

File:Magyar Nemzeti Bank 2.jpg File:Budapešť 0937.jpg File:Budapest, Szabadság tér, Nemzeti Bank épülete.JPG File:Magyar Nemzeti Bank.jpg

References

External links

* {{Central banks Banks of Hungary Central banks Magyar Buildings and structures in Budapest 1924 establishments in Hungary Banks established in 1924 Art Nouveau architecture in Budapest Art Nouveau government buildings