Dr. Tibor Szas;
George Matulsi
2023-01-05 06:00:00
Recently, the central bank’s independence from the government is often referred to. This would give the opportunity to the multinational bank to determine its monetary policy according to what it considers right to serve the economic interests of the country (society). According to experience, countries that have a central bank independent of the executive are more successful in monetary policy.
However, Viktor Orban’s successful efforts to build a “centralized force field” completely exclude the social democratic system, and thus the autonomy of the MNB. The 2013 Law on MNB established by the ruling majority clearly states that “the government decides on the exchange rate regime and all its features in agreement with the MNB”. So the government decided that MNB could only provide statistics here. As the head of the MNB, György Matolcsy also took note of this. He had no intention of protesting or resigning, but instead became Viktor Orban’s right-hand man.
The multinational bank could have prevented the forint devaluation from the start with a so-called monetary intervention, but it did not, because neither the government nor the National Bank of Malaysia was in the interest of doing so. The devaluation was linked to the foreign currency lending crisis. The severe devaluation that is taking place along with the government and MNB statistics has made it economically impossible for a large part of the families who had previously obtained the loan on concessional terms. The non-payment also burdened the Hungarian creditor banks, not to mention the fact that they had to pay the repayment part and interest to their foreign creditors in foreign currency, but they could only get them from MNB at a much higher rate than the HUF. .
In the end, the huge losses incurred by the Hungarian public and commercial banks ended up in MNB as large profits, which MNB in turn used to buy government securities, i.e. to finance government expenditures. Viktor Orban and Giorgi Matulcsi could have prevented all this, but they didn’t think of it. We can now ask what are the motives behind Matulski’s criticism of Orbán.
–
The opinions expressed in the article do not necessarily reflect the position of our editors. Our newspaper reserves the right to edit and shorten the articles received.
