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Banks to decide on PSzÁF's forex loan conversion recommendation, Banking Association says

Banks can decide at their own discretion whether to apply the recommendation set forth by the supervisory authority PSzÁF regarding the conversion of retail Swiss franc loans to euro-denominated loans, Hungarian Banking Association Senior Consultant János Müller told MTI on Wednesday.

Müller said the banks must review jointly with their clients which options are available in the client's given income situation and they must decide on an individual basis whether the currency conversion is available and under what conditions.

Converting the loans would make repayments more stable and predictable as volatility of the HUF/CHF exchange rate has "well exceeded" that of the HUF/EUR rate over the recent period, PSzÁF head Károly Szász wrote in a letter to banks on January 7. The letter included detailed advice regarding the ways banks could ease the conditions of the conversion.

In a release to MTI on Wednesday OTP Bank, however, warned that no one knows whether the recent appreciation of the Swiss franc is here to stay or not, and that Swiss franc interest rates have historically been lower than euro rates. Clients can hardly base long-term decisions on daily speculative currency fluctuations, the opinion of OTP Bank suggests. (MTI Econews)