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Hungary, UAE as gateway regions offer new opportunities for global economy: Governor of Hungarian Central Bank

Hungary, UAE as gateway regions offer new opportunities for global economy: Governor of Hungarian Central Bank
7 May 2024 21:23


Emergence of “gateway regions” such as Hungary and the UAE is a new opportunity for the global economy during a challenging decade, according to György Matolcsy, Governor of the Central Bank of Hungary (MNB).

In an exclusive interview with the Emirates News Agency (WAM) in Dubai, he said the current decade is a challenging one, with some geopolitical thinkers comparing it to the 1970s, a decade marked by recession, geopolitical tensions and related challenges.

However, Matolcsy said that there are always opportunities and ways out of difficult situations. “One of them is to use the fusion of talents, knowledge, technology and capital to create a complete, new sustainable world economic order,” said the MNB Governor who is on a three-day official visit to the UAE.

He also highlighted the importance of collaboration between regions during this "difficult decade". He identified the UAE and Hungary, along with Central Asia, as key "gateway regions" that can bridge divides and foster economic growth.

A gateway refers to a major port or airport or a country that serves as a hub for the transportation and distribution of goods.

Matolcsy pointed out the UAE’s strategic location in the Middle East and its “mission-oriented" leadership. The UAE’s leaders have a “mission-oriented and vision-oriented strategy” for the region, and they serve their people well, and it helps a lot, he stressed.

For Hungary, the governor emphasised its role as a bridge between Western Europe and Asia, well-positioned to benefit from the "unfolding new age of Eurasia."

The gateways he mentioned are important because they help to streamline the movement of goods, reduce transportation costs, and improve efficiency in the supply chain. They are also often equipped with advanced infrastructure and technology, making them ideal for handling large volumes of cargo and facilitating international trade.

Fintech, Bilateral Cooperation

Matolcsy highlighted Hungary’s efforts to support the development of fintech and digital payments, including the launch of a green mandate to promote sustainable economic growth. He also emphasised the importance of digital transactions, with above 90 per cent of financial transactions in Hungary being digital.

The governor said there are opportunities for bilateral cooperation between Hungary and the UAE in the fintech and digital payments sectors.

He said there is potential for cooperation in the development of central bank digital currencies (CBDCs), with Hungary and the United Arab Emirates already working together on this initiative.

Impact of AI, Cryptocurrencies

Asked about his thoughts on the potential impact of technological changes such as artificial intelligence (AI) on the financial sector, the governor acknowledged that there are two different opinions on the matter. While some experts see a bright future for AI, others see risks and dangers. Matolcsy said that innovations and new creative forces will be supported by the new thinking structures of AI. He sees the opportunity for a synergy between the two, with AI helping to improve the efficiency and effectiveness of financial services.

The governor also noted that cryptocurrencies and other digital assets will be a part of the new world of finance, but they will not take over the entire sector. He said a variety of new assets are emerging, with gold still playing an important role.

Finally, Matolcsy discussed the measures taken by the Hungarian Central Bank to contain inflation, which was badly affected by the COVID-19 pandemic. He highlighted the bank's success in fighting inflation, with interest rates currently at 7.75 per cent, which is expected to come down in the future.

During the visit, the governor attended Dubai Fintech Summit 2024, where he spoke at a fireside chat and presented his new book titled “Hungarian Vision and Strategy 2030/ 40”.

Source: WAM
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