Hungary, South Korea Central Bank Partnership Agreement

National Bank of Hungary (MNB) governor Mihály Varga has signed a partnership agreement with his counterpart from the Bank of Korea during a visit to Basel, the MNB told MTI on Monday.

The agreement creates opportunities for knowledge sharing and joint research between central banks, primarily in the field of digital financial innovations, the MNB said.

Mihály Varga participated at a meeting of the Bank for International Settlements (BIS) where he said that in a rapidly changing and uncertain global economic environment the most important task of central banks remains achieving price stability and maintaining financial stability.

According to Mihály Varga, recent years have proven that inflation can be the number one obstacle to sustainable growth, therefore it is essential for central banks to anchor inflation expectations.

The slight easing of trade tensions in recent months has somewhat improved the global economic outlook, but the growth prospects of Hungary's most important foreign trade partner, Germany, remain subdued, he added.

Financial markets remain sensitive to trade and geopolitical developments, with increasing fragmentation of international supply chains, continued increases in global food prices, and strong price dynamics in market services representing upside risks to global inflation. These factors justify a stability-oriented monetary policy by central banks, he said.