About 31% of borrowers opted for exchange rate limit scheme
About 31% of eligible borrowers with foreign currency-denominated loans opted to join an exchange rate limit scheme by the end of February, financial market regulator PSzÁF said on Monday. The number of borrowers who joined the scheme reached more than 141,000, PSzÁF said. Under the exchange rate limit scheme, launched about a year ago, borrowers may opt to cap their repayments based on the limit for up to five years. The difference between the rate of repayment and market rates is placed on a separate account for repayment later. Interest costs on the separate account are covered in equal part by banks and the state. The stock of loans registered for the exchange rate limit scheme came to HUF 1,152 billion at the end of February or 37% of eligible forex lending stock. The deadine for joining the scheme was recently extended to May 31, 2013. Hungarian households borrowed heavily in foreign currency when the forint was strong and FX loans were cheaper than forint ones. But the weaker forint raised repayments on the FX loans, causing the number of distressed borrowers to swell.
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