September 09, 2011
Hungary seeks to allow repayments at fixed FX rate
BUDAPEST, Hungary (AP) — Hungary's governing party is considering allowing people with debts in foreign currencies to repay them in a lump sum at an exchange rate much lower than current market rates, with banks forced to absorb all the costs.
Fidesz parliamentary faction leader Janos Lazar says debtors would be able to cancel their debts in Swiss francs at an exchange rate of 180 forints per franc, while debts in euros could be canceled at 250 forints.
Midday Friday the franc was worth 230 forints, while the euro traded at 270 forints.
State news wire MTI (News - Alert) says the government will decide on the proposal, which analysts say would lead to massive losses for banks and could be in breach of European Union rules, on Sunday.
Nearly two–thirds of Hungarian mortgages are in foreign currencies.