Gov't Extends Rate Freeze for Households, SMEs

Government

The government has decided to extend interest rate freezes for retail borrowers and SMEs until the central bank base rate falls under 10%, Gergely Gulyás, the head of the Prime Minister's Office, said at a regular press briefing on Thursday, according to state news wire MTI.

Bringing the base rate under 10% will require inflation to fall into the single digits, a goal the government aims to achieve by year-end, Gulyás said.

The rate freezes were set to expire on June 30.

Gulyás said the measure now affects more than 300,000 families with over HUF 1.36 trillion in credit. The freeze saved those borrowers HUF 80 bln in 2022 and HUF 60 bln in the first half of 2023, he added.

The freeze on corporate credit now affects 28,500 SMEs with close to HUF 1 tln in loans, he said. The freeze has resulted in savings of HUF 80 bln-85 bln for businesses since the introduction of the measure in November 2022, he added.

The rate freezes have affected altogether 350,000 households and 60,000 SMEs.

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