The building of the NBH in Budapest – Photo: wikimedia

NBH announces green monetary policy toolkit strategy

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 Barnabas Virag said on Tuesday.

It is clear that it is impossible to achieve economic growth if environmental conditions are ignored, Virag 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 percent refinancing to banks that will be lent to retail borrowers at a maximum fixed rate of 2.5 percent. 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, Virag said. The bank will review the programme when the 200 billion forint purchase volume has been reached, he added.

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