Legislation on FX car, personal loan conversion could take effect from December 1

MNB

Legislation on the conversion of FX personal and car loans could come into force from December 1 of this year, the National Economy Ministry told Hungarian news agency MTI.

The government will submit a draft of the legislation to lawmakers in mid-September, the ministry said.

The conversion will apply to all FX-denominated loans, including those denominated in yen, it added.

The ministry noted that more than 90% of FX loans that have not already been converted into forints are denominated in Swiss francs.

The Hungarian government signed an agreement with the Hungarian Banking Association a week ago, which stipulates that lenders will convert approximately HUF 305 bln of their FX vehicle and personal loans at the request of clients. Hungarian banks earlier converted their stock of FX mortgages.

The agreement locked in rates for the conversion at the National Bank of Hungaryʼs euro and Swiss franc fixings on August 19, but the more favorable rates previously used for the FX mortgage conversion will be applied to clientsʼ balances. The difference between the rates will be shared in equal part by banks and the state.

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