During a conference organized by portfolio.hu Thursday, Nagy noted that while interest rates, adjusted for the rise in consumer prices, have fallen all over the region, they have declined most in Hungary, national news agency MTI reported.
In this environment, it make sense for the state to issue debt with long maturities and low, fixed rates, Nagy said, pointing out that Hungaryʼs interest expenditures had dropped from 5% of GDP in 2013 to 3%, and are set to fall further. He encouraged businesses to take out credit and invest, rather than let their financial assets accumulate.
Lenders ought to fix the rates on their home loans for periods as long as 20-30 years, Nagy suggested. The central bank is weighing how to convert banksʼ existing floating-rate loans into fixed-rate vehicles, he added.
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