There were no bids at the previous two of the weekly tenders. Demand was high at the first such tender on October 13 when the MNB allotted nearly one-third of the combined €3 bln total that the MNB Monetary Council decided to allocate from the central bank international reserves in late September to cover FX demands of banks with regard to the settlement of refunds. The MNB program announced in September consists of two FX tender facilities to be operated weekly, or more frequently if necessary, starting October 13, 2014, at least until the end of March 2015.

Under borrowers’ relief legislation approved in the summer, lenders will have to refund nearly HUF 950 bln 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. The compensation, starting early next year, will mostly take the form of write-offs of the loans’ principal. The Banks’ individual practices are currently under review and the legislation will be scrutinized by the Constitutional Court.