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New retail forex loans continue to taper off; forint lending also down

The value of new forint loans Hungarian households signed in October fell compared to the previous month, and foreign currency-based lending continued to gravitate to zero as the result of a government ban on forex mortgage loans, the National Bank of Hungary's monthly rates report showed on Tuesday.

The government decided to ban the loans because of foreign exchange rate risks to borrowers at the very end of June. Although legislation enforcing the ban was not signed until early August, Hungary's biggest banks said they would voluntarily comply from the start of July.

Households signed contracts for HUF 16.7 billion of forint home loans in October, down from HUF 18.9 billion in September and HUF 19.1 billion in August, but still well over the HUF 5.0 billion in October 2009. They took out forint consumer loans of HUF 22.3 billion in October, also down on HUF 24.6 billion in September and HUF 23.2 billion in August, but well over the HUF 15.2 billion in October last year.

The value of new euro-based home loans again halved to HUF 200 million from HUF 400 million in September and HUF 800 million in August. It was HUF 12.6 billion in October 2009. The value of new EUR-based consumer loans was HUF 300 million in October after HUF 700 million in September, also sharply down from HUF 12.3 billion twelve months earlier. (MTI-ECONEWS)