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Gov't, banks reach compromise on participation threshold for exchange rate cap scheme

The government and banks have reached a compromise on the participation threshold for a scheme that caps the exchange rate for borrowers with foreign currency-denominated mortgages, internet portal said late Wednesday, citing government sources who did not wish to be named.

Under the compromise, only borrowers who took out the equivalent of HUF 20 million or less will be eligible for participation in the scheme.

The threshold would make the scheme available to 95% of borrowers with foreign currency-denominated mortgages, according to an amendment proposed earlier by governing Fidesz MP Antal Rogán. also said the scheme was likely to be made available only to public sector workers during the first two months after its launch. Eligible borrowers with mortgage loans could avail of the scheme from the third month, and borrowers with mortgage loans not necessarily used for the purchase of a home from the fifth month.

Under the scheme, the difference between the rate of repayment and market rates is to be placed on a separate account for later repayment. Banks and the government are to share in equal part the interest costs on the separate account.