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BUDAPEST, April 26 (Reuters) - Hungary's government has
infringed the National Bank of Hungary's (NBH) independence with
a decree restricting access to the bank's discount bill and by
extending a cap on large commercial bank deposits until
end-June, the European Central Bank said on Wednesday.
Hungary's government last month extended a cap on large
commercial bank deposits until the end of June and imposed
restrictions on the transfer of central bank discount bills to
curb "unjust" income earned on central bank facilities.
A government spokesman did not immediately respond to an
emailed request for comment. An NBH spokesman declined comment.
"The decree, including the interest rate cap, interferes
with the independence of the (NBH), since it impedes the (NBH)
from independently choosing the necessary means and instruments
to conduct an efficient monetary policy," the ECB said.
"Therefore, the decree infringes the independence of the
(NBH) under Article 130 of the Treaty."
Prime Minister Viktor Orban's government announced a cap on
large commercial bank deposits after the NBH launched a quick
deposit facility with an 18% interest rate last October to stem
falls in the forint.
The measure, under which commercial banks in Hungary cannot
pay an interest rate higher than the three-month discount bill
yield on deposits by certain large institutional and private
investors, had been due to expire at the end of March but was
extended until the end of June.
The ECB said the government's moves have curbed the NBH's
ability to perform its monetary policy.
The NBH, which on Tuesday paved the way for a cut in its
main policy rate over the coming months, has also come under
pressure from Orban's government to reduce borrowing costs.
(Reporting by Gergely Szakacs and Anna Wlodarczak-Semczuk,
Editing by William Maclean)
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