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Hungarian businesses net loan repayers, big depositors in February

After a rise in January, loans outstanding of Hungarian non-financial companies fell again in February as their forint loan stock fell on net repayments and their foreign currency denominated loans fell on revaluation changes (including a slight strengthening of the forint to the euro) despite limited net borrowing, the National Bank of Hungary (MNB) reported.

Businesses significantly raised both forint and foreign currency deposits in February after big withdrawals in January.

Excluding exchange rate changes and seasonal effects, businesses were, however, if only to a limited extent, net borrowers now for the second month after net repayments between last May and December, MNB charts suggest. The central bank noted that, because of fluctuations with the crisis, the results of seasonal adjustment are more uncertain than usual.

The forint loan stock of businesses fell to HUF 7.2 billion in a month to HUF 3,280 billion at the end of February as repayments cut the stock by HUF 5.9 billion and revaluation and other changes cut it by HUF 1.3 billion. Despite HUF 1 billion net borrowing of foreign currency denominated loans, their stock fell a combined HUF 3.7 billion on exchange rate and other changes, to be worth HUF 4,427 billion.

After withdrawing almost HUF 200 billion from forint deposits in January, businesses placed HUF 54.6 billion in forint deposits in February, and the stock rose to HUF 2,458 billion by the end of the month. They raised their foreign currency deposits by HUF 55.2 billion -- just the double of what they withdrew in January -- last month, and, including slight exchange rate and other gains, these deposits rose HUF 55.8 billion to HUF 1,283 billion.

Figures adjusted for exchange rate changes and seasonal effects show net forint borrowing of HUF 18.9 billion, net forint deposit withdrawal of HUF 16.2 billion and net HUF 16.2 billion placement in foreign currency deposits. The results of seasonal adjustment of foreign currency loans could not be interpreted due to big changes in the time series, the bank said.

The financial crisis and the recession pushed Hungarian companies from a net borrower into a net lender position in the last quarter of 2008. Their position improved into a more or less neutral one between February and June 2009, before deteriorating, with repayments far exceeded loans, last July. Net lending declined steadily since October. (MTI – Econews)