The Recent History of Hungarian Monetary Policy and Future Challenges for Central Banks

The role of central banks in shaping economic processes has been a key issue since their existence. This has typically always been related to the challenges faced by monetary policy decision makers at the time, and from the 2000s onwards even more so in the decade in question. In our essay, we focus primarily on the challenges facing Hungarian monetary policy, briefly outlining the developments in the past decades and elaborating on the challenges ahead. In the longer term, as a small, open economy, Hungary must respond to the prevailing and often interconnected international megatrends of the decade, assessing which of these developments represent challenges and which of these provide opportunities for the Magyar Nemzeti Bank to solve the challenges. In an era of geopolitical change, the green transition, demographic change, high debt levels and digitalisation, one thing is certain: central banks cannot lose sight of their primary objective of ensuring price stability.