MKIK Asks Gov't to Weigh Rate Freeze, Repayment Moratorium

Government

The Hungarian Chamber of Commerce and Industry (MKIK) on Thursday said it asked the government to consider the introduction of a rate freeze in a range of 5%-10% for corporate credit and a repayment moratorium for businesses with existing floating-rate loans "as long as the economic situation warrants", according to a report by state news wire MTI.

MKIK said that the pass-through of a decision by the National Bank of Hungary (MNB) almost a week earlier to raise the rate for its O/N deposit facility to 18% - well over the 13% base rate - was "lightning fast".

With the three-month BUBOR at 16.5% and lending margins around 4%, borrowing businesses face rates of over 20%, it added.

MKIK pointed to a mortgage rate freeze and a repayment moratorium in place for retail borrowers that cushioned the negative impact of higher lending rates but said dearer credit is a "huge blow" for businesses struggling with the energy crisis while on the brink of recovery from the pandemic. 

The chamber's chairman László Parragh warned that the impact on the operation of microbusinesses and SMEs could be "irreversible", threatening their headcounts and existence.

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