Hungary PM to detail forex loan fixing plan on Mon.
The spokesman was speaking on Sunday during a break from a government meeting that discussed a proposal by ruling party Fidesz under which households would be allowed to repay foreign-currency debt owed to banks at fixed exchange rates.
The proposal triggered a sharp fall in Hungarian assets, mainly equities, on Friday. The Budapest bourse's main index lost 6.2 percent and the shares of the country's biggest commercial bank, OTP, plunged 10.7 percent.
Fidesz proposed a 180-forint exchange rate for the conversion of Swiss franc loans and 250 forints on euro loans. Analysts said such levels could cause heavy losses for the banks.
Orban's spokesman, Peter Szijjarto, told television channel Hirtv that the government would have to work out a plan based on the Fidesz parliamentary group's proposal.
"The government will elaborate on a solution which is morally right ..., financially sustainable for everybody and legally also stands," he said.
Hundreds of thousands of Hungarians took up foreign-currency loans, mainly in Swiss francs, before the 2008 global crisis. The franc's surge since then has boosted repayments, hitting domestic consumption and economic growth.
The forint traded around 231 against the franc on Friday, having weakened significantly from rates of 150-160 seen when most of the loans were extended.
The Fidesz parliamentary group has said banks -- which have been paying a crisis tax since last year -- should take a bigger part of the losses on foreign-currency loans.
The Banking Association said the proposal to offer fixed-rate full repayment to foreign-currency borrowers threatened the stability of the financial system and could have a severe economic impact.
Analysts said bank losses, if the government accepts the proposal, would depend on how many loan holders join the scheme.
--SPA 23:39 LOCAL TIME 20:39 GMT
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|Publication:||Saudi Press Agency (SPA)|
|Date:||Sep 12, 2011|
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