Green Monetary Policy Toolkit Strategy Announced by National Bank of Hungary

  • 7 Jul 2021 9:45 AM
  • Hungary Matters
Green Monetary Policy Toolkit Strategy Announced by National Bank of Hungary
The National Bank of Hungary (NBH) has adopted a green monetary policy toolkit strategy which it will use to monitor how certain monetary policy tools can be used to achieve price stability and environmental sustainability objectives, NBH deputy governor Barnabás Virág said.

It is clear that it is impossible to achieve economic growth if environmental conditions are ignored, Virág told a press conference, adding that “everyone must respond to climate change.”

As part of the new strategy, the central bank’s Monetary Council has decided to launch a Green Mortgage Bond Purchase Programme in August, followed by the Green Home Programme in October, he said.

The Green Home Programme, a 200 billion forint (EUR 568m) preferential credit scheme, aims to support the purchase or construction of “highly energy-efficient” homes, the deputy governor said.

Under the programme, the central bank will provide 0% refinancing to banks that will be lent to retail borrowers at a maximum fixed rate of 2.5%.

Borrowers participating in the scheme may take out loans up to 70 million forints with terms as long as 25 years.

Meanwhile, with the Green Mortgage Bond Purchase Programme the NBH aims to contribute to the development of the domestic green mortgage bond market through targeted purchases, Virág said.

The bank will review the programme when the 200 billion forint purchase volume has been reached, he added.

The NBH will discuss further details of the programmes with market participants in the coming weeks, Virág said.

MTI Photo: Szilárd Koszticsák

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