Just 316 join forex-loan cap scheme in November

MNB

An exchange rate cap scheme designed to assist borrowers with foreign currency-denominated loans attracted 316 new participants in November, just a fraction of the number who joined in the months after its launch in spring 2012, according to new data from the National Bank of Hungary (MNB).

Under the scheme, borrower 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 around 18,000 in June 2013.

The MNB data show the number of contracts signed to join the scheme between April 2012 and November 2013 came to 166,089. Including contracts signed under an earlier such program, the exchange rate cap contracts came to 171,801.

The value of participants’ loans came to HUF 1,329 billion at the end of October. Stock of the technical accounts came to HUF 12.6 billion.

The MNB reported 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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