Voluntary Rate Caps to Fall
Photo by Martin Mehes / Shutterstock.com
Economic Development Minister Márton Nagy and representatives of the Hungarian Banking Association have agreed on reductions in lenders' voluntary rate caps for businesses and retail borrowers, according to a report by state news wire MTI.
At a meeting on Monday, the sides agreed that the voluntary rate cap for new business loans would fall from 11.5% to 9.9% from January 1, while the cap for home loan APRs would drop from 8.5% to 7.3%, the ministry said.
An agreement was also reached on winding up the voluntary rate cap measure parallel with the phasing out of the rate freeze for SME loans from April 1, 2024, it added.
The voluntary rate caps were adopted by lenders on October 9, after talks with Nagy. The minister said the government would commit to weighing the phase-out of the corporate rate cap and to starting a review of the cap on retail home loans if the central bank base rate fell under 10%. He also said the government would back the Hungarian Banking Association's plans and efforts related to the regulation of digitalization in the financial sector.
The National Bank of Hungary (MNB) base rate stands at 11.5% at present. After a monthly policy meeting in November, deputy governor Barnabás Virág said the base rate could fall under 11% by year-end and reach the single digits by February 2024.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.