Matolcsy said the central bank had continued its self-financing programme in 2016 and the persistently loose monetary policy pushed government bond yields lower.

The average yield for long-term bonds fell by 480bp and for short-term bonds by 670bp. Lower interest expenditures with the share of FX-denominated government debt falling to 25 percent have significantly lowered the country’s vulnerability, he added.

The NBH’s governor said banks’ SME loan portfolio expanded by more than 8 percent last year.

Commenting on central bank staff remuneration, Matolcsy said that the NBH is in midfield compared to other banks in Hungary. As far as other central banks in Europe are concerned, it comes only before Estonia and Lithuania, he added.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Kovács Tamás