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IMF could request lower bank levy, wider sharing of FX repayment burden - City analysts

The International Monetary Fund (IMF) is likely to ask Hungary to reduce the tax burden on banks and share the burden more broadly of a government scheme allowing full early repayment of foreign currency-denominated mortgages at discounted exchange rates, emerging market analysts based in London told MTI on Monday.

Hungary’s government announced on Thursday it was starting negotiations on a new type of cooperation with the IMF. The IMF and the EU said on Monday that Hungary had asked for precautionary financial assistance.

Hungary has very little to do in terms of fiscal consolidation next year, considering measures it has already taken, thus an IMF programme is not likely to involve paying a "serious political price" over and above reducing the tax burden on the financial sector and spreading the burden of the FX repayment scheme as conditions for assistance, JP Morgan’s investment and analysis division in London said.

Hungary introduced a levy on financial sector companies in 2010.