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MBSz Chairman: FX-loan relief plan will harm forint

Initiatives

As the week rolls on, Hungary’s politicos and banking interests get back to work on addressing forex-based loan issues.

As the week rolls on, Hungary’s politicos and banking interests get back to work on addressing forex-based loan issues.

On Tuesday, Hungarian Banking Association (MBSz) chairman Mihály Patai offered a dire warning on Hír TV, emphatically stating after meeting with MNB governor György Matolcsy that “If all banks were to decide that they will convert Swiss franc loans into forints, it would create such huge demand for the Swiss franc – we would need about CHF 10-12 billion to carry this program through – that the forint's exchange rate would be disrupted within days.”

Patai further stated that “The banking system and banks cannot resolve [the problem of forex-based mortgages] without the government’s support.” Patai’s comments echoed an MBSz statement of Monday which forecast a wildly fluctuating forint after such a bailout.

Also speaking on Hír TV on Tuesday was OTP chairman/CEO Sándor Csányi, who informed that installment payments for individuals on forex-based mortgage loans should be reduced by no more than 15% “if the Hungarian government does not want the holders of forint-denominated mortgages to be worse off by the relief program.” Analysis on Portfolio.hu reported the same day put the figure at 13%.

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