International reserves fall on FX lender allotment
Hungary's international reserves were at €34.218 bln at the end of October, down by €1.466 bln from a month earlier, preliminary data published by the National Bank of Hungary (MNB) revealed today.
According to Hungarian news agency MTI, the reserves fell as a result of a program launched by the central bank to provide lenders with foreign exchange necessary to refund retail clients under borrowers' relief legislation approved in the summer. The MNB initially made €3 bln from its international reserves available under the program, launched late in September.
The MNB said on Tuesday that it would allocate €9 bln for the lenders in order to support the phasing out of all retail FX loans and converting them to forint loans, as planned by the government. The MNB is stepping in to smooth the process and limit the impact on the forint's exchange rate.
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