MNB: Gold Reserves Strengthen the Country's Stability

The significant gold reserve strengthens the stability of the country, the economy and the image of the financial system, István Veres, Director of the National Bank of Hungary (MNB), wrote in a professional article published by the MNB on Friday, drawing attention to the fact that MNB has multiplied its gold reserve ahead of the growth in demand in the region and the world as a whole.

István Veres said that at the time of the regime change, Hungary's gold reserves had been reduced in several stages from 46 tons to 3.1 tons, and remained unchanged until 2018. Breaking this trend, the MNB decided to significantly increase the gold reserve in 2018, on the basis of long-term national and economic strategy considerations, and to increase the stock tenfold. In 2021, an additional 63 tons of gold were purchased, bringing the gold reserve to 94.5 tons.

The Director pointed out that by increasing its gold reserve, MNB was years ahead not only of the international trend, but also of the regional central banks – the Polish and Czech central banks – which announced their own purchase program only in 2023. Hungary still holds the top spot in the region in terms of gold reserves per capita, with 0.32 ounces. Poland is second (0.30 ounces), Bulgaria and Serbia third and fourth (0.20-0.20 ounces).

He explained that central banks around the world are increasing their gold reserves in a decade of uncertainty, with gold demand rising in both 2021 and 2022, reaching a historic high of 1,082 tons in 2022. Following the outbreak of the coronavirus epidemic in 2020, but especially from February 2022, the start of the Russian-Ukrainian war, global economic developments are characterized by uncertainty and international markets by increased volatility. Last year, central bank purchases amounted to 1,037 tons, while total global gold demand reached a new historic record of 4,899 tons.