New retail bond highly popular

A pro-government commentator describes the government’s new retail bond scheme as a huge success. A left-leaning analyst, on the other hand, finds it controversial that tax revenue is used to pay for the favorable interest rates.

In the first week of issue, the new government bond with a gradually rising interest rate (see BudaPost June 3) has become Hungary’s bestselling domestic retail bond ever. In a week, 529 billion in Forints were purchased. The bond is available for Hungarian nationals.

In Magyar Hírlap, Gábor Putsay finds the new bond beneficial both for Hungarian individuals and the state. Hungarian savers who buy the retail bonds benefit from the high yields, while the government can secure internal funding which strengthens Hungary’s financial stability, Putsay contends. The pro-government columnist hopes that credit rating companies will soon acknowledge Hungary’s increasing financial stability and upgrade the country’s credit rating status.

Napi.hu’s Bernadett Herman criticises  the scheme as she asserts the new government bonds sold so far will cost Hungarian taxpayers 100 billion forints. She finds it obvious that the higher bond yields care paid from public money and calculates that, as of now, the high bond yields cost every Hungarian citizen 10,000 forints. Herman, nevertheless, acknowledges that the new bond will further decrease mortgage and other loan interest rates, and thus ease the plight of Hungarian debtors.

Tags: aconomy, interest rate