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Kúria to take legal uniformity decision on forex-based loans [Update: Orbán comments]

Issues

Hungary’s supreme court, the Kúria, yesterday announced it believes it will be necessary to take a legal uniformity decision on questions of the validity of foreign currency-denominated loans.

The court issued the statement after a meeting of Kúria judges with their peers at the Szeged Civil Court of Appeals, the first court in Hungary to deal with the question of the validity of forex-based loan contracts.

The motion to launch the procedure will be posted on the Kúria’s website on November 25.
Prime Minister Viktor Orbán said a week ago that a legal uniformity decision by the court would allow the government to take a decision on the forex-based loans that “is in harmony with the legal position established by the judiciary.”

Update: The PM this morning took to the airwaves to comment on the issue from Japan via that radio station on which he seemingly most frequently guests. Report from national news service MTI runs below.

Hungary’s government expects the judiciary to decide whether banks or borrowers should bear the burden of losses on foreign currency-denominated loans resulting from exchange rate changes, Orbán said in an interview on public radio broadcast early Friday.

Orbán told Kossuth Rádió that “sober values would otherwise dictate” that banks should carry the burden, noting their strength and their professional competence.

He said the government also expected the judiciary to take a decision on whether banks can make unilateral changes to interest rates on loans that were taken out earlier.

Asked whether there was a deadline for the court to take the decisions, Orbán said the government does not rush the judiciary, but added that he hoped to see the decisions “as soon as possible.”

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