National Bank of Hungary takes swipe at government

The National Bank of Hungary on Wednesday released a terse statement rejecting the Hungarian cabinet's selection of central bank official to attend meetings about problematic foreign currency loans in the country.

The central bank said it had received only an "informal" notification of the delegation made by György Matolcsy, the minister of the national economy. Marton Nagy, a director at the bank, was initially selected by the government to meet government and banking association representatives.

"The central bank did not receive any formal written request on that subject," said a spokesperson for the central bank on Thursday. If it were to receive such a request, the institution would be represented by deputy governor Júlia Király at the meeting," she added, confirming the earlier statement posted on the central bank website.

The consultation between the three parties will be held to discuss the impact of loans that have been issued to Hungarians in euros, Swiss francs and yen. As global financial stability deteriorates, these loans have been affected by swinging currency values, making repayment extremely difficult.

There is a long history of uneasy discourse between the central bank and the government in Hungary, Last year, the European Commission and the European Central Bank waded into an ongoing dispute over an attempted pay cut for central bank staff.

In June, András Simor, governor of the National Bank of Hungary, hit back at the government of Viktor Orbán, and the repeated attacks on him and the central bank. Simor said the government's campaign against the central bank was "dangerous and prone to fail". He added: "Every political attack has a price and the citizens are the ones who have to pick up the tab."

Earlier this year it was reported that tensions had eased somewhat, but it seems all is not well, as the tone of the statement released this week demonstrated.