Hungarian Monetary Policy Operations Before, During, and After the Pandemic: Hungary

Within its inflation-targeting framework, the Magyar Nemzeti Bank (MNB) has frequently adjusted its monetary operations. This has raised questions about their internal consistency, appropriateness, and effectiveness. A broader assessment, implying a comparison to a counterfactual, is outside the scope of this paper. Our prior is agnostic. We find that the changes were generally well-motivated within the MNB statutory powers; prioritized, transparently explained, and monitored; and promptly adjusted, when they no longer served their purpose. Occasionally, some tools have worked at cross purposes. Government policies have at times hampered monetary policy. Simplicity comes with a premium, as complexity can blur signals.