Just 209 join exchange rate cap scheme in October
An exchange rate cap scheme designed to assist borrowers with foreign currency-denominated loans attracted 209 new participants in October, just a fraction of the number who joined the scheme in the months after its launch in the spring of 2012, newly-released data from the National Bank of Hungary (MNB) show.
Under the scheme, borrowers' repayments are based on the exchange rate cap until maturity or for a period of five years. The difference between the capped rate and market rates is placed on a technical account for repayment later.
The number of participants joining the scheme has fallen in most months since peaking at approximately 18,000 in June 2012.
The MNB data show the number of contracts signed to join the scheme between April 2012 and October 2013 came to 165,773. Including contracts signed under an earlier such program, the exchange rate cap contracts came to 171,485. The value of participants' loans came to HUF 1,303 billion at the end of October. Stock of the technical accounts came to HUF 11.8 billion.
The MNB said earlier that more than half of eligible borrowers have joined the scheme.
Inexpensive, Swiss franc-based loans were once the most popular retail lending product in Hungary, until the weaker forint caused repayments to grow, pushing many households close to default.
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