BUDAPEST, Nov 3 (Reuters) - Hungary's central bank will provide an extra 600 billion forints ($2.11 billion) of funding for a cheap loans programme aimed at boosting economic growth, extending the scheme into 2016, a newspaper said on Tuesday.
Central bank governor Gyorgy Matolcsy, an ally of Prime Minister Viktor Orban, launched the programme in 2013 to help government stimulus efforts by encouraging commercial banks to boost lending to companies.
The central bank, which is due to hold a news conference at 1400 GMT about a new pro-growth programme, declined to comment on the report, which appeared in daily Magyar Idok.
Bank Deputy Governor Marton Nagy said last week it would offer new incentives to commercial banks to increase lending.
Citing unnamed sources, Magyar Idok said the central bank would provide the extra funds in two tranches of 300 billion forints. The banks could provide part of the extra loans in foreign currencies to exporting firms, the newspaper said.
Hungary's economy is projected to grow by 2.8 percent this year, based on a Reuters survey, and to slow to 2.3 percent in 2016 due to lower European Union development funds.
The government said last month that it had started talks with local banks to remove impediments to corporate lending and boost credit supply.
The central bank has cemented its base interest rate at a record low of 1.35 percent to boost the slowing economy.
The bank, which has brought down its main rate in two cycles from a 7 percent peak in mid-2012, has said it will keep the benchmark steady "over a longer horizon than expected," as inflation is below target and the economy is headed for a slowdown.
$1 = 283.69 forints Reporting by Krisztina Than; editing by John Stonestreet