Hungary: More forex debt relief in pipeline

Written by on August 1, 2013 in Europe - No comments

Banks were trembling this week as the government prepared to announce another strategy to help households saddled with foreign-currency mortgages – whose repayments rocketed when the economic crisis hit in 2008. Hungarian Economy Minister Mihály Varga announced on July 31 2013 that foreign-currency credit should be removed from Hungary’s lending market.

However, fears – stoked recently by comments by Deputy Prime Minister Tibor Navracsics – that banks would be forced to take a significant haircut on their forex mortgage portfolios were assuaged somewhat by Varga’s further remarks. He added a proviso that any scheme introduced should not give forex borrowers a better deal than those who took out mortgages in the forint – effectively ruling out a forced return to the pre-2008 exchange rate.

Forex mortgage debt entails “economic and social risks with which the country cannot live in the long run”, Varga told state news agency MTI.

For the full story, please visit The Budapest Times

(Photo: Krisztián Hoffer/sxc.hu)

Comments

comments

About the Author