Hungary Central Bank to Provide 9 Billion Euros for Banks for FX Conversion

Budapest, November 4 (MTI) – Hungary’s central bank has pledged to provide 9 billion euros to Hungarian banks in order to cover associated costs of converting loans in foreign currency to forint ones, the National Bank of Hungary’s Monetary Council decided today.

The 9 billion from the bank’s international reserves is intended to meet banks’ demand for foreign exchange related to the conversion of retail FX loans into forint loans, the NBH said.

Accordingly, the bank will extend its existing FX sales programme launched late September in which it had allocated 3 billion euros from its FX reserves to meet demand for the settlement of refunds due borrowers under summer legislation.

The 9 billion was calculated from the retail FX loans remaining after the refunds were settled, it said.

The Hungarian government plans to phase out retail FX loans — converting them into forint loans — next year as a third step of recent legislation helping troubled borrowers.

Under borrowers’ relief legislation approved in the summer, lenders must refund nearly 1 trillion forints to retail clients for using exchange rate margins when calculating repayments on FX loans and for making unilateral changes to both FX and forint loan contracts.

Source: http://mtva.hu/hu/hungary-matters