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Government weighing proposals by banks, MNB

MNB

Hungary's government is considering National Bank of Hungary (MNB) proposals on assistance for borrowers with forex-based mortgages as well as those from the Hungarian Banking Association (MBSz), National Economy Minister Mihály Varga told MTI on Thursday.

The government discussed the matter of assistance for forex-based loan borrowers at a cabinet meeting on Wednesday, but did not take any decision, Varga said. Consultations with the banking association will continue, he added. The banking association presented the government with two proposals at a meeting on Tuesday. They involve a combination of converting the FX loans into forints, interest subsidies and an exchange rate limit.

In a study published on Monday, MNB executives suggested that offering debt relief to participants in an existing exchange rate limit program for borrowers with foreign currency-denominated loans as well as extending the run of the scheme would make it more popular.

MNB deputy governor Ádám Balog and executive director Márton Nagy said in the paper that relieving borrowers “to a certain degree” of the part of the principal that exceeds an exchange rate of 180 forints to the Swiss franc would cost an annual HUF 30 billion to HUF 40 billion. If the entire amount over the 180 threshold is forgiven, it “would mean the conversion of outstanding principal of FX mortgages into forints.”

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