Lenders, cbank set to reach agreement on growth scheme by mid-May

Hungarian lenders appear almost sure to reach an agreement with the National Bank of Hungary on the central bank's recently announced "Funding for Growth Scheme" by the middle of May, Hungarian Banking Association chairman Mihály Patai said in an interview published in Tuesday's issue of daily Népszava. "It's in our joint interest to bring the Hungarian economy from its nadir at present," Patai told the paper. Hungarian lenders continued a series of meetings with MNB officials on Monday to discuss the scheme. Under the Funding for Growth Scheme, the central bank will make a combined HUF 500 billion of 0% financing available to banks for SME lending and the conversion of foreign currency-denominated corporate loans into forint ones. Lenders' interest margin will be capped at 2.5% on loans financed with the MNB credit. The central bank will also cut international reserves by €3 billion by reducing short-term external debt, thus lowering the stock of two-week bills from HUF 4,500 billion to HUF 3,600 billion.