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MNB may help banks pay FX compensation

MNB

The National Bank of Hungary (MNB) is getting ready to help banks compensate customers, following the recently approved borrower’s relief legislation, MNB deputy governor Ádám Balog announced on Saturday.

According to a new law adopted on July 4 by the Hungarian parliament, banks have to compensate borrowers who were charged for foreign exchange fluctuations, and who saw their contracts unilaterally modified without any legal ground. Compensation will cost banks an estimated €3 bln, and the central bank is taking the necessary steps to help them meet this demand, the deputy governor said.

Hungary's government has expressed its intention to phase out FX loans, the most popular retail lending products in Hungary in the last decade. The central bank’s international reserves topped €35.5 bln by the end of August, fresh data show.

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