Barnabas Virag, Deputy Central Bank of Hungary, said at the central bank’s briefing meeting on the green financing strategy that it will start purchasing green mortgage certificates in 2021.
Stating that the green financing plan will not affect the tight monetary policy, Virag said that he will receive a green mortgage certificate worth 200 billion Hungarian forints.
Stating that it will provide refinancing to banks at 0 percent interest within the framework of the Green House Program, the central bank plans to give loans to borrowers with a fixed 2.5 percent interest. Borrowers included in the program will be able to borrow up to 70 million forints and a maturity of 25 years.
Hungary has announced that it has entered a cycle of monetary tightening.
Announcing that it has entered a monetary tightening cycle in June, the Hungarian Central Bank is planning to prevent price increases in the European Union with the highest inflation rate by increasing the benchmark interest rate from 0.6 percent to 0.9 percent.
Stating that the tightening in monetary policy will continue, the Hungarian Central Bank stated that future interest rate decisions will be based on data and that the bank has entered the cycle of increasing interest rates.
“The Monetary Policy Committee will continue to increase interest rates until the inflation outlook reaches the bank’s target and the risks arising from inflation are balanced,” the central bank said in a statement.
Climate change was included in the CBRT report for the first time
The Central Bank of the Republic of Turkey published its study on financial risks stemming from climate change and environmentalist finance for the first time in its Financial Stability Report published at the end of May.
While it was stated in the report that “climate change is considered by international financial institutions as a structural problem with various risks for the financial system”, the European Union’s growth strategy with the European Green Deal (AYM) was also mentioned.
“Digitizing the climate crisis is critical for inflation targeting”
TSKB Chief Economist Dr. Burcu Ünüvar stated that she sees the CBRT’s handling of the effects of the climate crisis, primarily within its research activities, as a useful start.
Ünüvar said, “Digitizing the effects of the climate crisis and sharing it in monetary policy communication stands out as one of the most critical steps for Inflation Targeting, which is a social consensus regime. The agenda of the world and our country indicates that the role of central banks will gradually increase in the fight against the climate crisis.” said.
“Climate change will become a monetary policy issue”
Bank of Japan Governor Haruhiko Kuroda also stated on Friday that climate change would be taken into account in the bank’s monetary policy discussions.
Stating that they are very interested in climate change, Kuroda said, “Naturally, how we should respond to this problem in monetary policy discussions will be one of the topics discussed.”