A strong banking system supports financial stability

Budapest, 13 July – The Hungarian banking system’s capital position remains robust and its liquidity is ample, enabling it to effectively support the country’s financial stability, said MNB Governor Mihály Varga at the 37^th Annual General Meeting of the Hungarian Banking Association. Varga highlighted that the Magyar Nemzeti Bank continues to regard the Hungarian Banking Association as a key partner in protecting customers, combating financial cyber fraud and safeguarding financial stability.

MNB Governor Varga pointed out that, amidst uncertain global economic developments, the importance of stable institutions in the financial sector and the professional cooperation underpinning financial stability had become even greater. He added that this was precisely why the joint achievements of the Magyar Nemzeti Bank and the Hungarian Banking Association in the domestic financial services market over the past year were particularly important. The Governor noted that, according to the latest data, the capital adequacy ratio of the Hungarian banking system stood at 21 percent, marking a historic high. As a result, the Hungarian banking system was able to effectively support the Hungarian economy, thereby strengthening financial stability. Varga stressed that, from the perspective of domestic financial stability, it was especially important that Hungary’s inflation outlook had improved, while global risks had eased. He explained that inflation, which had exceeded 5 percent at the beginning of last year, had fallen to 1.7 percent by June of this year and that, following an analysis of developments in the first half of this year, the MNB had lowered its inflation forecast for 2026 from the previously projected 3.8 percent to 1.8 percent. The Governor added that, in view of these developments, the Monetary Council had reduced the base rate to 6 percent at the end of June and saw scope for further rate cuts in the summer. The appropriateness of this cautious and patient approach was thus confirmed by market stability and the steep decline in inflation expectations.

Magyar Nemzeti Bank

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.