Economy 21 October 2022, 9:17am

PM’s political director: gov’t has full confidence in Matolcsy

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The central bank made its interest rate decision - which led to a significant weakening of the forint - independently at the end of September, and the government will meet all the European Commission's requirements by mid-November, Balázs Orbán, political director for Prime Minister Viktor Orbán told Reuters late on Thursday.

Balázs Orbán stated that the central bank's decision in September (to stop raising interest rates, which then led to a severe depreciation of the forint) was an independent decision by the central bank and that the government had full confidence in central bank Governor György Matolcsy.

The Hungarian currency is also under pressure because the European Commission recommended the suspension of €7.5 billion ($7.29 billion) in funds last month because Hungary is judged not to be fighting corruption and upholding the rule of law. Although the proposal could easily be overridden under the baseline scenario, the protracted dispute and uncertainty over EU funds is weighing on financial market operators.

Balázs Orbán said he was confident that Budapest would resolve the issue with the Commission by mid-November.

I think that by mid-November we will fulfil all the requirements of the Commission and I hope we will get the green light.