The banking system in Hungary is straightforward and many foreign banks have opened branches in Hungary. The Magyar Nemzeti Bank is Hungary’s national bank and a member of the European System of Central Banks and the European System of Financial Supervision. The national bank observes the implementation of the banking law throughout the entire territory of Hungary.
Although Hungary is a member of the European Union since 2004, the national currency is the Hungarian Forint (HUF). Foreign investors in Hungary can choose the desired currency when opening accounts in Hungary. The fees often vary according to the chosen currency and initial deposits must be made when opening an account at a Hungarian bank.
Monetary policy in Hungary
The exchange rate in Hungary is established by the Hungarian Government together with the Magyar Nemzeti Bank. The reference currency is the forint-euro. The Hungarian central bank publicly announces an inflation target and takes the necessary steps to meet the target. The prime objective is to obtain and maintain price stability in Hungary.
Inflation in Hungary is likely to remain low, under the 3% target for 2014. According to an analysis performed by the Hungarian Monetary Council, the Hungarian economy is growing steadily as of 2013 and the economic growth is likely to continue.
Recent changes in the Hungarian banking law
Bank lending in Hungary has decreased in the second part of 2014, as compared to the beginning of the year. The Hungarian prime minister has announced recent changes to the banking law that wish to help individuals who have foreign-currency loans in Hungary.
The newly approved law is a controversial measure that forces banks to refund borrowers who concluded consumer credit agreements, dated as far back as 2004. The banks must share the burden with individuals who have loans in foreign currencies, particularly Swiss francs.
The exact manner in which the banks will refund the borrowers was not yet described by the Hungarian Government.
For more information about the Hungarian banking system and the applicable legislation for foreigners and Hungarian nationals, please contact our law firm in Hungary