A government bond purchase programme launched by the National Bank of Hungary (NBH) this week has curbed long-term yields successfully, Governor Gyorgy Matolcsy said on Sunday, adding that the central bank would only use this tool to the extent necessary.
FILE PHOTO: Hungarian Central Bank Governor Gyorgy Matolcsy speaks during a business conference in Budapest, Hungary, March 10, 2020. REUTERS/Bernadett Szabo
Long-term yields have dropped since the bank announced its plans last week under a large-scale effort to shore up the economy hit by the coronavirus pandemic. Yields edged up on shorter-date bonds after the first auction. “We will of course continue the programme, but this is a crisis-handling programme,” Matolcsy said. “This will last only as long as and done only to the extent necessary.”
Prime Minister Viktor Orban’s government expects the economy to shrink by 3% this year, while economists polled by Reuters project a 4% decline due to the restrictive measures and factory shutdowns triggered by the pandemic.
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