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Hungary's central bank boosts gold reserves to a record high 110 tons
Hungary now claims the highest per-capita official gold reserves in central and eastern Europe.
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From the Hungarian National Bank, Budapest
Monday, September 30, 2024
Taking Hungary's long-term national and economic strategic goals into account, the Hungarian National Bank decided to increase the gold reserve from 94.5 tons to 110 tons.
The increase in the gold reserve was supported by the further strengthening of the global economic, geopolitical, and capital market processes that led to the appreciation of the role of gold in recent years.
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Amid the increasing uncertainty character of the world economy as a whole, the function of gold as a safe haven and value preserver is of particular importance, because it strengthens trust in the country and supports financial stability. Gold remains one of the most important global reserve assets, which is supported by the significant central bank gold purchases of recent years. By increasing gold reserves, Hungary has the highest gold reserves per capita in the central and eastern European region.
In 2024, the centenary year of the foundation of the Hungarian central bank -- Magyar Nemzeti Bank -- the bank 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 processes that have contributed to the appreciation of the role of gold have continued to strengthen. Gold has served many functions in various financial systems throughout history.
Gold effectively complements foreign exchange reserves even under normal market conditions. When financial and geopolitical uncertainty increases, in an extreme market environment, the function of gold as a safe haven and value preserver is of particular importance, it can strengthen trust in the country and support financial stability.
Thanks to all these beneficial properties, gold remains one of the most important reserve assets worldwide.
Central bank demand for gold also supported this in recent years. Central bank purchases also increased in 2021-2022, reaching a historical peak in 2022 (1,082 tons), and then in 2023, slightly below the historical peak, but also 1,000 tons.
The MNB has held gold reserves since its foundation in 1924, but its holdings have fluctuated greatly. The stock of the gold reserve increased until the Second World War, and at the end of the war, the central bank evacuated gold bars and gold coins weighing around 30 tons to Spital am Pyhrn in Austria on the MNB's legendary "Gold Train."
After the war, the gold reserve was returned to the country and, as collateral, it supported the stabilization of the Hungarian economy and financial consolidation when the forint was introduced. During the regime change, Hungary's gold reserves were reduced in several steps to a minimal level of around 3.1 tons.
With long-term national and economic strategic goals in mind, the MNB increased the gold reserve more than tenfold to 31.5 tons in 2018, and then tripled it to 94.5 tons in 2021.
By increasing the gold reserve to 110 tons, the MNB continued the gold purchase process started in 2018 in order to achieve long-term national strategic goals. The Hungarian gold reserve thus rose to a record level.
In the field of regional central banks, by increasing gold reserves, Hungary's gold reserves per capita will rise from 0.32 ounces to 0.37 ounces, so that our country currently has the highest gold reserves per capita in the central and eastern European region.
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