Economy
Hungary Varga says would not accept nomination for c.bank chief post
The approach of the IMF is different from the government’s line of thinking, because the cabinet also needs to take into consideration political and social policy aspects. One of the key considerations for the Fund is how Hungary will create growth and it is less adamant on keeping the budget deficit below 3.0% of GDP, Varga said.
They want to see how this will lead to growth, how investments, which are necessary for growth, will be made, why banks are not lending and how large the burden is on the financial sector, he added. In Varga’s view, however, the decline in the loan-to-deposit ratio is a natural phenomenon and the extent of lending does not hinge on whether there is a bank tax or not and how large it is.
The IMF had a hard time interpreting the government’s information campaign, Varga admitted. They were surprised as they have never seen anything like it before, he added.
With respect to the funding outlook of Hungary he said that in view of the monetary policy conducted by the Federal Reserve and the European Central Bank (ECB) he is not concerned that conditions will worsen fast. Hungary will most likely be able to sell its government securities safely in the first half of 2013, he added.
As for the upcoming change in the top seat of the central bank he noted that it will create an opportunity to bring monetary and fiscal policy in harmony. When asked about his potential candidacy for the post Varga responded: “I have not received such requests and I would not accept the position even if I was asked to. I feel there are some more important issues in Parliament."
In a Portfolio.hu survey conducted about a month ago the market said Varga stood the biggest chance of replacing NBH Governor András Simor when his mandate expires next March.
They want to see how this will lead to growth, how investments, which are necessary for growth, will be made, why banks are not lending and how large the burden is on the financial sector, he added. In Varga’s view, however, the decline in the loan-to-deposit ratio is a natural phenomenon and the extent of lending does not hinge on whether there is a bank tax or not and how large it is.
The IMF had a hard time interpreting the government’s information campaign, Varga admitted. They were surprised as they have never seen anything like it before, he added.
With respect to the funding outlook of Hungary he said that in view of the monetary policy conducted by the Federal Reserve and the European Central Bank (ECB) he is not concerned that conditions will worsen fast. Hungary will most likely be able to sell its government securities safely in the first half of 2013, he added.
As for the upcoming change in the top seat of the central bank he noted that it will create an opportunity to bring monetary and fiscal policy in harmony. When asked about his potential candidacy for the post Varga responded: “I have not received such requests and I would not accept the position even if I was asked to. I feel there are some more important issues in Parliament."
In a Portfolio.hu survey conducted about a month ago the market said Varga stood the biggest chance of replacing NBH Governor András Simor when his mandate expires next March.
