Reducing inflation is paramount - central bank Deputy Governor candidate

After Kurali had answered the questions, the members of the Economic Committee voted on the candidate. The result: 11 for, 1 against, 3 abstentions.

A decision on Central Bank Digital Currency (CBDC) will be an important one, but it cannot be a substitute for cash. The technology has not yet been put in place.

(Central Bank Digital Currency (CBDC) is a new form of money that exists only in digital form. Instead of printing money, the central bank issues widely accessible digital coins so that digital transactions and transfers become simple.)

The money market transmission is fully in operation, said Kurali.

He has nothing to do with the central bank foundations, he has no interest in them, he said in response to a question from an MP.

"The adoption of the euro should be a joint decision of the government and the central bank. The economy must be ready, and fulfilling the conditions for joining ERM-2 will increase the country's stability. We should join when we are most ready," said Zoltán Kurali.

"We are cutting non-core activities, but not research. We want to develop it," said Kurali.

The exchange rate has to be stable because then you can plan with it, he said when asked about the forint exchange rate.

EUR/HUF

Source: Portfolio-Teletrader Kft.

The Governor of the MNB had talks with the Hungarian Banking Association, and the market players have committed to lower their fees, Kurali pointed out.

"I was socialised in the competitive marketplace," Kurali recalled of his banking career when answering questions from MPs. Without competition in the financial market, there will be no proper prices and services. The MNB and financial sector players should strive to increase competition, he added.

His mandate is for six years, Kurali stressed. He wants the MNB to be at the top of the profession, just as he wants it to be at the end of his mandate. He emphasised that the focus of the MNB's activities will be on the classic central bank mandate.

We need an interest rate policy that can ensure price stability, he stressed. The aim is to maintain a positive real interest rate.

The priority is to reduce inflation. Kurali underlined his commitment to the 3% (+/-1 ppt) inflation target.

The MNB said in its latest quarterly Inflation Report last month that it expected inflation to remain about the upper level of the inflation target tolerance band (4%) throughout the year, returning to the 3% +/-1ppt band it by early 2026.

The former CEO of the Government Debt Management Agency (ÁKK) emphasised that he will maintain a high level of professionalism and discipline at the MNB. He said that he has considerable experience in capital markets.

The budget has been significantly rebalanced over the past year. The labour market is stable and employment levels are high. The economy returned to growth in the last quarter, but this could be significantly affected by the uncertainty caused by the tariff war.

Public debt should continue to fall. Inflation fell in March, but we cannot be complacent. Every effort must be made to bring inflation back within the tolerance band of 2-4%, said the Deputy Governor-elect.

Erik Bánki, chairman of the economic committee from the ruling Fidesz party, said that Zoltán Kurali could replace Mihály Patai as Deputy Governor of the MNB. Bánki invited Zoltán Kurali to start with a presentation of his professional career.

Under the Central Bank Act, the deputy governors of the MNB are elected by Parliament for a six-year term on a proposal from the Prime Minister. According to the law, the candidate for Deputy Governor is interviewed by the economic committee of the National Assembly.

The MNB has a minimum of two and a maximum of three Deputy Governors. Mihály Varga has been the new MNB Governor since March, and the central bank currently has three Deputy Governors. Mihály Patai's six-year term expires on 21 April this year, and Zoltán Kurali is likely to be his successor.

The nomination of Zoltán Kurali is not entirely unexpected and should not come as a big surprise to the markets. In December last year, during the hearing of then MNB Governor candidate Mihály Varga, it was revealed that the former head of ÁKK would strengthen the central bank president's team.

The appointment of Kurali sends a message to the markets that an experienced professional, already well known to investors and market participants, will become a key player in the MNB.

Zoltán Kurali was also in the front row at Mihály Varga's first press conference after the March policy meeting.

After graduating from the Budapest University of Economics and Business Administration, Zoltán Kurali worked as a macroeconomic analyst and then as a treasury sales manager at Citibank. From 2006 to 2019, he continued his career at Deutsche Bank, where he held the positions of CEO Hungary, Regional Head of Capital Markets, Head of Bond Markets and Head of Corporate Finance. During these 13 years, he has also worked on issues such as financial facilitation for emerging economies and financial risk management. At the request of the Minister of Finance, he was appointed CEO of the Public Debt Management Centre from 1 September 2019 to 31 January 2025. Zoltán Kurali has regularly participated in Portfolio conferences.

Cover photo: Stiller Ákos