Hungary’s central bank, the Magyar Nemzeti Bank (MNB), raised its gold reserves from 3.1 tonnes to 31.5 tonnes, it was announced on October 16. Physical delivery of the gold to Hungary took place in the first half of October.
Hungarian gold reserves peaked at 65-70 tonnes in the early 1970s. After a decision made at the end of the 1980s to reduce the reserves, the amount was cut to 10 tonnes and later it dropped to the current three tonnes.
In March the central bank transferred back 100,000 ounces of gold from London. “It has become an important consideration to keep gold reserves at a location that ensures safety in case of geopolitical crises,” the central bank said then.
The MNB did not disclose how much it paid for the 2,300 bars, but one ounce of gold was quoted between $1,190 and $1,230 on the global market earlier this month when the MNB bought gold for the first time since 1986.
Possession of the precious metal within the country is in line with international trends, supports financial stability and can further strengthen market confidence in Hungary according to the MNB's statement.
The value of the gold reserves stands at about $1.24bn, at current prices. The share of gold reserves in the central bank's international reserves has risen to 4.4%, which is in line with the average for non-eurozone countries in Central and Eastern Europe, the MNB noted. Romania has a higher share than that, around 10% of its reserves are held in gold, and in Slovakia the share exceeds 25%.
The central banks of Poland and Romania have the biggest stock of gold in the region with 112 tonnes and 103 tonnes respectively. Globally, the US is ranked first with 8,000 tonnes.
The MNB’s international reserves stood at €23.73bn at the end of September, compared to the €24.2bn at the end of 2017.