Hungarian National Bank
Hungary's central bank, responsible for monetary policy, currency issuance, financial stability and banking supervision.
Last updated October 14, 2026
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Overview
The Hungarian National Bank, known in Hungarian as Magyar Nemzeti Bank and commonly abbreviated MNB, is the central bank of Hungary. It is part of the European System of Central Banks and represents Hungary in a range of European and international financial institutions. Its principal statutory objective is to achieve and maintain price stability, while it also supports the government's economic policy when doing so does not compromise that primary objective. The bank's responsibilities include conducting monetary policy, setting the central-bank base rate, influencing domestic liquidity and credit conditions, issuing and managing Hungary's currency, publishing official exchange rates, holding and managing foreign-exchange and gold reserves, and contributing to the stability of the financial system. The MNB also carries out financial-supervisory functions and participates in the European supervisory architecture through bodies including the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Securities and Markets Authority, the European Systemic Risk Board and the Anti-Money Laundering Authority. It is the dominant shareholder of the Budapest Stock Exchange and of KELER Group, Hungary's securities-settlement and financial-market-infrastructure group. The institution was created in 1924 during an international stabilization programme organized under the League of Nations. It succeeded the post-World War I Royal Hungarian State Note-Issuing Institute and was established after Hungary experienced severe monetary instability. In 1927 it introduced the pengő, replacing the korona. The pengő later collapsed during the extreme hyperinflation of 1945–1946, after which the MNB introduced the forint on 1 August 1946. The bank was nationalized in 1947. During the communist period, Hungary operated a single-tier banking system in which the MNB combined central-bank functions with commercial and development-banking activities. A two-tier system was restored on 1 January 1987, refocusing the MNB on monetary policy and central banking. Following the political transition, legislation adopted in 1991 restored central-bank independence, while later legislation defined the relationship between the MNB and the government in setting the exchange-rate framework and monetary-policy objectives. The forint has floated freely against the euro since February 2008. The MNB uses an inflation-targeting framework with a medium-term target of approximately 3 percent. Its Monetary Council is the principal monetary-policy decision-making body, and the governor is appointed by the President of Hungary on the proposal of the Prime Minister for a six-year term. The bank's mandate was expanded in 2021 to include sustainability-related considerations. In practice, the MNB has also used targeted lending, self-financing and financial-stability programmes alongside conventional interest-rate policy. Hungary has not adopted the euro, so the MNB retains national control over monetary policy and the forint. The institution has remained a central participant in debates over Hungary's economic policy, central-bank independence, inflation, foreign-currency lending, government debt and financial regulation. In 2025, Hungary's State Audit Office reported alleged irregularities involving the MNB and entities associated with former governor György Matolcsy, including an allegation concerning approximately 500 billion forints. The matter became a major controversy and requires careful distinction between reported audit findings, political allegations and legally established conclusions.
History
The institutional roots of Hungarian central banking reach back to the nineteenth century. During the 1848 revolution, the revolutionary government briefly used the Hungarian Commercial Bank of Pest for central-bank-like functions. After the Austro-Hungarian Compromise of 1867, Hungary continued to share a monetary institution with Austria. The Austro-Hungarian Bank, created in 1878 from the Austrian National Bank, had a dual operating structure with important offices in Vienna and Budapest, but Hungarian nationalists continued to seek a separate national institution. After World War I and the dissolution of the empire, Hungary established the Royal Hungarian State Note-Issuing Institute on 11 July 1921. It issued the korona but remained closely controlled by the government and could not prevent accelerating inflation. A stabilization loan coordinated through the League of Nations' Economic and Financial Organization provided the framework for creating the Hungarian National Bank in 1924. The new institution became Hungary's central bank and introduced the pengő in 1927, replacing the korona. In 1930 it was among the founding shareholders of the Bank for International Settlements. The Second World War and its aftermath produced an extreme monetary crisis. The MNB was unable to preserve the value of the pengő during the hyperinflation of 1945–1946, one of the most severe episodes of inflation ever recorded. Hungary responded by introducing the forint on 1 August 1946. The MNB was nationalized at the end of 1947. Following the communist takeover, Hungary adopted a single-tier banking system. The MNB became the leading financial institution within a structure that also included the national savings bank, an investment and development bank, and the foreign-trade bank. In this system, the MNB lacked operational independence from the state and performed some commercial-banking functions in addition to central banking. A two-tier banking system was restored on 1 January 1987, separating commercial banking from the MNB's monetary-policy role. The political and economic transition after 1990 brought renewed emphasis on central-bank autonomy. The October 1991 National Bank Act reinstated independence, and the 2001 legislation set out the relationship between the Hungarian government and the MNB in determining the exchange-rate regime. The bank became responsible for modern inflation-targeting and financial-stability policy while continuing to issue the forint and manage national reserves. Hungary's planned 2010 euro adoption did not occur, allowing the MNB to retain control of domestic monetary policy. The forint entered a freely floating relationship against the euro in February 2008. In the twenty-first century, the MNB expanded its role beyond conventional interest-rate decisions. It became a major participant in banking supervision, macroprudential policy, targeted lending and financial-market development. It is the dominant shareholder of the Budapest Stock Exchange and KELER Group and works within European supervisory institutions. Its medium-term inflation objective is approximately 3 percent. The statutory framework also requires the bank to support government economic policy when consistent with price stability, and sustainability considerations were added to its mandate in 2021. The bank has operated amid recurring debates about inflation, exchange-rate policy, fiscal coordination, foreign-currency mortgages, central-bank independence and the proper limits of central-bank investment and quasi-fiscal activity. Leadership changed in 2025 when Mihály Varga succeeded György Matolcsy. That transition coincided with a State Audit Office report alleging that approximately 500 billion forints connected to the MNB and Matolcsy-linked entities had been laundered or otherwise mishandled. The allegations became a significant institutional controversy; their precise legal consequences and final adjudication are not established by the supplied reference material.
- 2025
Change of governor and audit controversy
[1]Mihály Varga became governor after György Matolcsy's term, while a State Audit Office report alleged major financial irregularities involving the bank and related entities.
- 2021
Sustainability considerations added to the mandate
[1]The MNB's statutory mandate was amended to include sustainability-related objectives alongside its traditional responsibilities.
- 2008
Forint begins freely floating against the euro
[1]The forint moved to a free float against the euro on 26 February.
- 2001
Modern central-bank framework adopted
[1]Act LVIII of 2001 defined the government's and MNB's roles in setting the exchange-rate regime and monetary policy.
- 1991
Central-bank independence reinstated
[1]The October 1991 National Bank Act restored the MNB's independence during Hungary's post-communist transition.
- 1987
Two-tier banking system restored
[1]A two-tier banking model was reintroduced, reducing the MNB's commercial-banking role and restoring its focus on central banking.
- 1947
Nationalization
[1]The Hungarian National Bank was nationalized at the end of 1947.
- 1946
Forint introduced
[1]Hungary introduced the forint on 1 August after the collapse of the pengő during postwar hyperinflation.
- 1930
Founding shareholder of the Bank for International Settlements
[1]The MNB became one of the founding shareholders of the Bank for International Settlements.
- 1927
Pengő introduced
[1]The MNB introduced the pengő as Hungary's new currency, replacing the korona.
Products and positioning
Hungary's sovereign central bank and monetary-policy authority, operating within the European System of Central Banks.
Central-bank policy
Monetary policy
The MNB sets and implements Hungary's monetary-policy stance, principally through the Monetary Council and the central-bank base rate. Its framework is centered on a medium-term inflation target of approximately 3 percent, with policy decisions also taking account of financial stability, exchange-rate conditions and broader economic developments.
Currency · 1946
Hungarian forint
The MNB issues and manages Hungary's national currency, the forint. Its currency responsibilities include controlling money in circulation, maintaining cash-processing arrangements and exchanging demonetized or damaged notes and coins at designated offices.
Financial regulation
Financial supervision and macroprudential policy
The bank supervises financial institutions and contributes to the resilience of Hungary's banking and financial system. It participates in European supervisory structures and uses macroprudential tools to address systemic risks, credit conditions and market vulnerabilities.
Reserve management · 1924
Foreign-exchange and reserve management
The MNB manages Hungary's foreign-exchange and gold reserves and publishes official exchange rates. Reserve operations support monetary and financial stability rather than functioning as a retail banking product.
Economic policy programme
Targeted lending and self-financing programmes
In addition to conventional interest-rate policy, the MNB has used targeted financing and self-financing initiatives to influence bank funding, credit availability and the structure of domestic financial markets.
Controversies
2025
State Audit Office allegations concerning MNB-linked funds
A Hungarian State Audit Office report alleged that the MNB and entities associated with former governor György Matolcsy participated in the laundering or improper handling of approximately 500 billion forints. Hungarian media described the matter in exceptionally severe terms. The supplied material does not establish a final court judgment, so the allegations should be reported as an ongoing controversy rather than proven criminal conduct.
Brand decisions
2021
Expansion of the statutory mandate to sustainabilityStrategyBackground
Central banks and financial regulators were increasingly incorporating climate and sustainability risks into policy frameworks.
Action taken
Hungary amended the MNB's mandate to include sustainability-related objectives.
Aftermath
The bank gained an explicit sustainability dimension, although the supplied material says green lending had not significantly expanded in Hungary.
2008
Adoption of a free-floating forintStrategyBackground
Hungary was operating a managed exchange-rate framework while considering eventual euro adoption.
Action taken
The forint was allowed to float freely against the euro from 26 February.
Aftermath
The MNB retained greater control over domestic monetary conditions, while the currency became more directly exposed to market movements.
1987
Restoration of two-tier bankingStrategyBackground
The communist-era single-tier banking system combined central-bank and commercial-banking activities within the MNB.
Action taken
Hungary restored a two-tier system that separated commercial banks from the central bank.
Aftermath
The MNB returned to a more conventional monetary-policy and central-bank role.
1946
Introduction of the forintProduct launchBackground
The pengő had collapsed during Hungary's postwar hyperinflation.
Action taken
Hungary introduced the forint on 1 August, with the MNB responsible for the new currency.
Aftermath
The forint became Hungary's national currency and remains in use.
1927
Introduction of the pengőProduct launchBackground
The korona had suffered from severe monetary instability after World War I.
Action taken
The MNB introduced the pengő as Hungary's replacement currency.
Aftermath
The pengő later became the currency affected by the extreme hyperinflation of 1945–1946.
Sources1 sources
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