Hungarian National Bank

(Magyar Nemzeti Bank), the bank of issue; the credit and account center of the country. It was organized in 1924; the Austro-Hungarian Bank was its predecessor. The present system and functions were established in 1948, after the nationalization of December 1947. It has retained a joint-stock form; the chief shareholder is the state, which owns 95 percent of the shares.

The Hungarian National Bank organizes and regulates money circulation, carries out short- and middle-term crediting of all sectors of the national economy; long-term crediting of the capital investments of agricultural, commercial, and industrial cooperatives; cash servicing of the state budget; operations with gold and foreign valuta; payments with foreign countries; and other banking operations. As of Jan. 1, 1968, with the transition to the new system of management, changes were made in the bank’s operation in accordance with the Law on the Hungarian National Bank (1967) and the resolution of the government of the Hungarian People’s Republic entitled On Money Circulation and Bank Credit (1967). In its work, the bank is guided by the directives for credit policy, which are worked out and confirmed annually by the government at the same time as the confirmation of the national economic plan. In 1969, the basic rate for middle-term credits was 8 percent per annum, and that for short-term credits, 7 percent. On overdue sums, an additional 6 percent is levied. The fixed capital of the bank is 120.8 million forints. The bank performs its work through its center in Budapest and its system of managing boards in the megyes (counties) and branches in districts.