Monetary Council’s decision on technical changes to the Magyar Nemzeti Bank’s government securities purchase programme

9 March 2021

The MNB’s government securities purchase programme launched after the outbreak of the coronavirus pandemic has continuously strengthened the effectiveness of monetary policy transmission and has successfully contributed to maintaining the stable liquidity position of the government securities market. Since the start of the Programme, the amount of securities in the MNB’s balance sheet has risen by nearly HUF 1,500 billion.

The third wave of COVID-19 and growing risks of reflation in developed economies have recently led to rises in yields and heightened volatility in financial markets. In this rapidly changing environment, the Magyar Nemzeti Bank continues to aim to maintain the effectiveness of monetary policy transmission and support the stability and liquidity position of the government securities market.

To this end, the Monetary Council stands ready to conduct purchases under its government securities purchase programme flexibly, without limits on individual series. If warranted by the stability and liquidity position of the government securities market, the MNB’s purchases may exceed the 50 percent share of individual series. This modification does not affect weekly amounts of purchases, only the structure of purchases, and therefore the MNB’s monetary policy stance will remain unchanged.

The MNB will conduct transactions in certain government securities segments by taking account of market stability considerations. This measure is expected to enhance the flexibility of the Programme and the effectiveness of government securities purchases. The MNB will use the government securities purchase programme through a lasting market presence to the extent and for a period necessary.

MAGYAR NEMZETI BANK

Monetary Council

Vissza a tetejére

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 maintenance of the stability of the system of financial intermediation, the enhancement of its resilience, its sustainable contribution to economic growth; furthermore, the MNB shall support the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal.