Hungarian households made more repayment in foreign currency than borrowed in forint in December 2011, the National Bank of Hungary (MNB) reported on Tuesday. Most of the FX repayments and all forint borrowing in the month were made under the government’s preferential-rate FX mortgage repayment scheme.
Transactions reduced household debt by HUF 226.1bn and the weakening of the forint raised it by HUF 77bn in December. The debt fell to HUF 8,506.3bn at the end of 2011.
Households repaid net HUF 288.8bn foreign currency denominated loans in December, of which FX loans worth HUF 259.9bn at market value were repaid under the government scheme which allowed retail borrowers of FX mortgages to make full early repayment of their loans at preferential exchange rate. The borrowers paid banks HUF 188.4bn at the preferential rate, with banks covering the gap.
Retail borrowing in forint rose HUF 62.2bn in December, with HUF 63.1bn -more than the total net rise - stemming again from the the early repayment scheme, from forint loans raised to help the early repayment of FX mortgages.
Household deposits rose in December as they increased their forint deposits and reduced their foreign currency deposits only marginally.