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MNB to publish info soon on providing banks with FX for loan repayments soon

The National Bank of Hungary (MNB) will publish information on providing foreign exchange necessary to banks for the government's FX mortgage repayment scheme in the near future, the MNB press department told Econews on Thursday.

Econews asked the MNB to comment on a Dow Jones report which said that the MNB may start selling foreign exchange through auctions to commercial banks next week to support the recently approved scheme which allows borrowers to repay in full foreign currency-denominated mortgages at a discounted exchange rate.

The MNB has met local banks to discuss the framework of the FX conversions related to the early repayment scheme, Dow Jones reported on Thursday, citing UniCredit as a source.

MNB governor András Simor said last week that the MNB would provide banks with foreign currency from its international reserves based on demand in order to dampen the significant stability risk involved in the scheme.

Based on an MNB estimate that about HUF 1,000bn-1,100bn or 20% of retail forex lending stock will be repaid under the scheme, MTI calculated that demand for foreign exchange created by the early repayment scheme could reach €3.8bn, at current exchange rates, or a bit more than 10% of the MNB's €37.6bn of foreign exchange reserves at the end of August.