Both lenders and the state would be likely assume the costs of the margin between the 180-forint ceiling and the actual exchange rate, though this was not made clear by the authors of the central bank’s study.
In the third instalment of a series of articles published by the central bank on the problems connected to loans taken out in foreign currencies, deputy governor Adam Balog and managing director Marton Nagy said the current five-year period during which borrowers had the option to repay interest at a fixed exchange rate could be extended. Alternatively, it could be expanded to include not only the interest but the entire loan.
Those that opted to join the scheme to repay interest at the fixed exchange rate currently accumulate the difference between 180 forints and the actual exchange rate at a separate account that must be repaid, plus interest, in the future. In line with the proposal, this account would be partly repaid by the state on behalf of borrowers.
The number of borrowers who joined this scheme has been gradually increasing and reached 37 percent of all borrowers last June. However, some 257,600 clients with loans totalling 1,187 billion forints did not take up the opportunity, the article added.
According to the central bank, many borrowers were discouraged from joining the scheme because it is too complicated and because instalments can be expected to rise sharply at the end of the five-year period during which the exchange rate is fixed. Additionally, many are waiting for a more preferential rescue scheme for FX borrowers.