2023-09-26 06:00:17
They also extended the deposit interest rate cap and the ban on buying central bank bonds.
The government’s decision to amend the economic emergency government decrees was published in the Magyar Közlöny. The Viktor Orban a decree signed by the Prime Minister extended the effect of three previous measures expiring at the end of September until the end of the year.
Mandatory promotions, the deposit interest cap and the ban on buying central bank bonds will definitely remain until December 31. The amendment has already entered into force.
Regarding the background of the decision, the Ministry of Economic Development (GFM) wrote that they will take action against any unfair behavior that takes advantage of the current difficult economic situation.
Some institutional investors turned the higher yields that arose due to inflation to their own advantage, and achieved such an income that they could now reasonably, risk-free realize even the previous central bank interest rate of 18 percent.
According to the government’s decision, until the end of the year, certain institutional investors (banks, housing savings banks, insurance companies, investment funds) and retail customers who deposit at least HUF 20 million cannot receive a higher interest rate on their sight deposits with commercial banks with a term of up to one year in the 3-month Discount Treasury Bill auction at the rate of its average return.
It was also decided that the unrestricted transfer of central bank discount bonds will continue to be prohibited until December 31, so specified financial organizations, and natural persons above HUF 20 million, may not purchase HUF-denominated debt securities issued by the central bank of an EU member state.
The ministry reminded him that, in order to break inflation, mandatory promotions were introduced from June 1, the amount of which was increased to one and a half times as of August, and the range of designated products was significantly expanded. According to the GFM, ruthless price competition has developed in the retail trade with the mandatory promotions and the price monitoring system. They decided to extend the mandatory promotions until December 31 because, according to their expectation, the measure will cause food inflation to fall further, and unjustified price increases by price speculators can be curbed.
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