By Margit Feher

BUDAPEST--The National Bank of Hungary Wednesday rejected a claim from the State Audit Office that it had unlawfully supplied bank data to the International Monetary Fund that qualified as a business secret, in the latest phase of the central bank's struggle to retain its independence.

The central bank aimed to avoid financial stability risks by providing bank data to the IMF, the bank said. The goal was to keep the money the country received from the IMF in the form of a loan within the country's borders while there remained a risk that the foreign parent banks of Hungary's retail banks might transfer the funds back home, it said in a press release.

Except for OTP Bank Nyrt. (OTPIY), Hungary's largest bank by market share, all major Hungarian retail banks are owned by a foreign parent bank.

The central bank has been at loggerheads with Prime Minister Viktor Orban's government for over two years and perceived threats to its independence have also brought clashes between Hungary, the European Commission and the European Central Bank--who say a key prerequisite for a credible monetary policy is the autonomy of the central bank.

The State Audit Office conducted a probe into the central bank's operation over an 18-month period that ended June 30, 2012.

The central bank exceeded its scope of authority when it supplied data to the IMF regarding Hungary's seven biggest banks, the State Audit Office said earlier Wednesday. It also said the central bank's operation over that period was basically in line with regulations but listed some additional faults it found in several areas, including the handling of documents.

Hungary was the first European Union country to turn to the IMF for a bailout during the global financial crisis in 2008 and it received a standby credit of about 16 billion euros ($21.38 billion) from the EU/IMF. It has been in negotiations with the international institutions for further support for more than a year, with no results.

"The central bank's operation is in line with the legal requirements. Contrary to the State Audit Office's claims, the central bank didn't exceed its scope of authority when providing data to the IMF in relation to the loan agreement, and its document handling system meets the content of the regulations," National Bank of Hungary said in a release.

The bank acknowledged that it had failed to obtain prior written agreement from the banks on supplying their data to the IMF but has remedied that by launching an investigation to find those responsible and has received the written consent from the banks in the meantime.

The six-year mandate of the central bank Governor Andras Simor will expire March 3 and financial markets expect Mr. Orban to appoint a new governor who will agree to cooperate closely with the government.

"Taken as a whole, the State Audit Office's report fails to give a realistic picture of Hungary's central bank, and the quality of the report is not in the line with the State Audit Office's basic values," the central bank said.

"The State Audit Office's attitude and approach is suited to undermine trust in an impartial audit," it added.

Write to Margit Feher at margit.feher@dowjones.com

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