The European Investment Bank (EIB) and the Central Bank of Hungary (MNB) have signed an agreement to enable the EIB to support the Hungarian economy with more long-term loans. The operation creates a new source of more affordable financing for Hungarian clients in local currency and will in turn accelerate sustainable economic growth, the post-pandemic recovery and climate action in Hungary.
This cooperation allows the EIB to offer fixed-rates forint loans to its clients in Hungary for periods of up to 20 years, and in return provides the MNB with access to euro for their operations.
“This cooperation will mitigate the exchange rate risk currently affecting Hungarian borrowers of loans in euro and allows more long-term investments in infrastructure, climate action, sustainable cities and regions, and environmental sustainability,” said EIB Vice-President Teresa Czerwinska, who is responsible for operations in Hungary.
“It expands the range of long-term financing options available in Hungary, a crucial precondition for sustainable growth and a competitive economy. I would like to thank the MNB for the support to EIB in its role as a reliable booster of Hungarian economic and social development,” underlined the Vice-President of EIB.
MNB Deputy-Governor Barnabás Virág pointed out that in 2021, the MNB’s mandates have been supplemented with the support of the Government’s policy linked to environmental sustainability.
“In line with its green mandate, the MNB approved the Bank’s Green Monetary Policy Toolkit Strategy and decided to launch two new programmes: the Green Mortgage Bond Purchase Programme and the Green Home Programme to boost green mortgage lending and improve the energy efficiency of the domestic housing stock,” said the Deputy-Governor. He underlined that the agreement with the EIB is another important step toward supporting the financing of Hungary’s green projects.
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-ranking currency in terms of disbursed amounts after the euro, US dollar and Polish zloty.