PM Orban: Dangerous times lie ahead; reserves, collateral and security are needed
Dangerous times lie ahead, therefore the world cannot continue where it left off before the pandemic. In a situation such as this, reserves, collateral and security are needed, said Hungarian Prime Minister Viktor Orban on Tuesday at a joint press briefing with the Hungarian National Bank (MNB) governor at the institution's logistics headquarters.
After viewing the gold reserves held by the Hungarian National Bank in the company of the institution’s governor, Viktor Orban emphasized that in order for the population to have money, that money has to have value. The value of a currency is guaranteed by three factors: gold reserves, the central bank and the government.
“Confusing and dangerous times lie ahead and the world cannot continue where it left off before the pandemic. In a situation like this, reserves, collateral and security are needed,” the prime minister said and thanked MNB Governor Gyorgy Matolcsy for ensuring the necessary reserves, cover, and security for the nation.
He recalled that a few years ago they became aware of a trend beginning on the gold market as a result of a global shift in central banks’ gold purchasing and reserve policies. What they saw was the conviction that although funds and credit were abundantly available on the markets, times will come when relying on credit alone will not be sufficiently secure, he explained.
The government – upholding the independence of the central bank – advised the institution “let there be more [gold reserves] and let them be at home,” the prime minister said. It was not the government’s purview, however, to decide how much more gold the central bank should amass and when it should arrive in the country.
Viktor Orban also pointed out that it is a several-year-long procedure to bring gold stocks home from the customary locations of storage, and that cash as well as gold in the country is kept under the most state-of-the-art security conditions. This is not a “fly-by-night” operation, for Hungary is also in a very prominent position in the technological race, the prime minister said.
MNB Governor Gyorgy Matolcsy emphasized that in 2018, the central bank decided to increase Hungary’s gold reserves tenfold on the strategic advice of the prime minister. A second expansion was decided last year, raising the country’s gold reserves to the current 94.5 tonnes.