BUDAPEST (RockedBuzz via Reuters) – Hungary should not consider adopting the euro before 2030 as joining the single currency zone before its economy is properly prepared would backfire, the bank governor said on Friday central Gyorgy Matolcsy.
Matolcsy said that once Hungary reaches about 90% of the EU average level in terms of economic development, then the adoption of the single currency could be placed on the agenda.
“It’s dangerous to join the rich club while the economy is unprepared,” Matolcsy told state radio.
“Maybe around 2030 or a little later we could reach… 90% of the EU average in terms of development, then it is worth joining (the eurozone) because the euro has many advantages,” Matolcsy said.
But until then it is worth using the extraordinary leeway the Hungarian central bank has to boost the economy, he added.
The National Bank of Hungary is currently battling the highest inflation rate in the EU, with an annual rate of 24% in April, as the economy slows sharply.
The bank cut its one-day deposit rate by 100 basis points to 17% last month, starting a cycle of policy easing as high interest rates virtually stifled lending.
Finance Minister Mihaly Varga said last week that Hungary is working to meet the conditions for joining the euro, but has no target date for adopting the single currency and the matter is not on the agenda. of the day for now.
Among Hungary’s EU neighbours, Austria, Croatia, Slovenia and Slovakia have already adopted the euro.
(Report by Krisztina Than; Editing by Mark Heinrich)