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Watchdog plans no restrictions on forex-based lending

Hungary's financial market watchdog PSzÁF does not plan to introduce any restrictions on foreign currency-denominated lending, spokesman István Binder told MTI.

Binder was reacting to a decision announced earlier on Monday by MKB Bank that it suspended all new foreign currency-denominated lending because of exchange rate risks to clients. Other banks said they would continue offering clients the products, and some said they were assessing the situation.

Binder said Hungarian banks are taking the same steps as big foreign banks, though to varying degrees of intensity: cutting back on their activity and steering clear of riskier transactions.

Legal steps have been taken over the past several days to bolster confidence in the banking sector, he said, citing a decision to raise the limit on deposit insurance, topped with an unlimited state guarantee of deposits, and now the market is also taking steps to reinforce trust, even at the price of holding back growth.

The daily liquidity reports of banks continue to show a reassuring picture, Binder said. (MTI – Econews)