National Bank Increases Gold Reserves to a Record High
Tue Oct 01 2024
Gold continues to be one of the most important global reserve assets, as evidenced by the significant central bank purchases in recent years. In 2024, the centenary year of the founding of the Hungarian National Bank, the MNB decided to increase the gold reserve from 94.5 tons to 110 tons, taking into account Hungary’s long-term national and economic strategic goals.
In recent years, the global economic, geopolitical, and capital market developments that have contributed to the appreciation of the role of gold have further strengthened. Gold has historically played a number of roles in different financial systems. It is an effective complement to foreign exchange reserves even under normal market conditions.
All these advantages mean that gold remains one of the most important reserve assets worldwide. Central banks’ demand for gold in recent years has confirmed this: central bank purchases continued to rise in 2021-2022, reaching a historic peak in 2022 (1,082 tons), and in 2023, slightly below the historic peak, central bank demand also exceeded 1,000 tons.
The Hungarian National Bank has held gold reserves since its foundation in 1924, but its stock has fluctuated widely over the decades. The stock of gold reserves rose until World War II, when at the end of the war, the MNB evacuated some 30 tons of gold bullion bars and gold coins to Spital am Pyhrn in Austria. After the war, the gold reserves were returned to the country and used as collateral to support the stabilization of the Hungarian economy and financial consolidation when the forint was introduced. At the time of the end of Communism in Hungary (1989), the country’s gold reserves were reduced in several stages to a minimum level of around 3.1 tons.
Source: https://hungarytoday.hu