FX-loans costs reviewed
Hungary's central bank’s experts say recently approved borrowers’ relief legislation could cost the country’s financial sector HUF 700 to 900 bln. Earlier estimates put compensation costs between HUF 600 and 900 bln forints.
Central bank deputy governor Ádám Balog said to Hungarian business daily Napi.hu that experts had raised the bottom end of the range from HUF 600 bln to HUF 700 bln while the top end stayed intact.
The law, passed in June, forces banks to compensate borrowers for losses incurred due to foreign-exchange fluctuations.
The degree to which the National Bank of Hungary could assist with its own reserves in the conversion of FX loans depends on numerous factors, pointed Balog. He said he agreed with analysts who estimate a one-off conversion of the loans would require €12 bln. “The NBH is not capable of handling the conversion of all of the affected loans,” the deputy stated.
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