New exchange rate limit contracts drop sharply in August

MNB

The number of borrowers with forex-based loans freshly joining the government's exchange rate limit scheme dropped sharply in August: The number of new contracts fell to 720 from nearly 2,700 in July, the National Bank of Hungary (MNB) reported in its new role as financial market regulator yesterday. 

Under the exchange-rate-limit scheme launched in spring last year, borrowers may opt to cap their repayments based on the limit for up to five years. The difference between the rate of repayment and market rates is placed on a separate account for repayment later. Interest costs on the separate account are covered in equal part by banks and the state. The deadline for joining the scheme was extended several times, then eliminated on May 28.

The number of new contracts fell below 9,000 a month in February after varying between 12,000 and 18,000 between May 2012 and January this year. The number of exchange-rate-limit contracts signed since April 1, 2012 came to 160,321 at the end of August, MNB figures show.

The stock of loans registered for the exchange-rate limit scheme came to HUF 1,336 billion at the end of August, down a slight HUF 4.1 billion from a month earlier. The MNB did not publish the ratio of the number or value of the contracts to the total number eligible to participate in the scheme.

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