September 11, 2011 / 11:01 PM / 8 years ago

Hungarian PM to detail fx loan fixing plan on Monday

* Govt discussed foreign exchange fixing proposal, no details

* PM Orban to speak about plan in parliament on Monday

* Will be financially sustainable for everyone-spox

BUDAPEST, Sept 11 (Reuters) - Hungarian Prime Minister Viktor Orban will announce details of a new plan to help foreign currency borrowers and other new economic policy plans in parliament on Monday, his spokesman, Peter Szijjarto said on Sunday.

Szijjarto spoke during a break at a government meeting to discuss a proposal from the ruling Fidesz party’s parliamentary group that households should 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 dropped 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 and analysts said these levels could cause heavy losses to the banks.

Szijjarto told the television channel Hirtv that the government would have to work out a plan based on the parliament group’s proposal.

“The government will elaborate 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, weighing on domestic consumption and economic growth.

The forint traded around 231 against the franc on Friday, compared with 150-160 when most of the loans were extended.

The Fidesz parliament group has said banks, which are already paying a large crisis tax since last year, should take a bigger proportion of the losses on the foreign currency loans.

The Banking Association said the proposal to offer fixed rate full repayment to foreign currency borrowers posed a threat to the stability of the financial system and could have severe economic impacts. (Reporting by Sandor Peto)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below