EIB and MNB sign agreement to support Hungarian economy with long-term loans
The European Investment Bank (EIB), the bank of the European Union, and the Magyar Nemzeti Bank (MNB), the Central Bank of Hungary, have signed an agreement allowing the EIB to support the Hungarian economy with loans longer term. The transaction creates a new, more affordable source of financing for Hungarian customers in local currency, the forint (HUF), and will in turn accelerate sustainable economic growth, post-pandemic recovery and climate action in Hungary.
This cooperation allows the EIB to offer fixed rate loans in forint to its customers in Hungary for periods of up to 20 years and, in return, gives the MNB access to the euro for its operations.
EIB Vice-President Teresa Czerwinska, Head of Operations in Hungary, said: “This cooperation will mitigate the currency risk currently faced by Hungarian borrowers of euro loans and enable longer-term investments in infrastructure. , climate action, sustainable cities and regions, and environmental sustainability. It expands the range of long-term financing options available in Hungary, an essential prerequisite for sustainable growth and a competitive economy. I would like to thank the MNB for supporting the EIB in its role as a reliable engine of Hungarian economic and social development”
MNB Deputy Governor Barnabás Virág said, “In 2021, the mandates of the MNB were completed with the support of government policy related to environmental sustainability. In line with its green mandate, the MNB has endorsed the Bank’s Green Monetary Policy Toolkit. strategy and decided to launch two new programs – the Green Mortgage Bond Purchase Program and the Green Homes Program – to boost green mortgage lending and improve the energy efficiency of the national housing stock. The agreement with the EIB is another important step towards supporting the financing of national green projects. Environmental sustainability considerations do not affect the general direction of monetary policy.
The operation is the EIB’s response to growing market demand for local currency indexed loans. For the EIB, the Hungarian forint is currently the fourth currency in terms of amounts disbursed after the euro, the US dollar and the Polish zloty.