Parliament on Tuesday approved an extension of the deadline for applying to join a support scheme for borrowers with foreign currency-denominated loans to May 31 from the end of March. Under the exchange rate limit scheme, 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 stock of loans registered for the exchange rate limit scheme came to HUF 1,034 billion at the end of January or 34% of eligible forex lending stock the latest data from financial market watchdog PSZÁF show. The Hungarian Banking Association voiced its support for extending the scheme’s deadline in a statement on Monday. Hungarian households borrowed heavily in foreign currency when the forint was strong and FX loans were cheaper than forint ones. But the weaker forint raised repayments on the FX loans, causing the number of distressed borrowers to swell.
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