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Parliament Passes Law on Forex Loans

admin 2014.07.07.

Parliament has passed the law regarding forex loans on Friday, in which the state will be involved in converting forex loans to Hungarian Forint based ones. The vote passed with 184 in favor, 1 against, while 2 abstained, which will enter into force after eight days of publication.

The law states that after bypassing the unfair elements of the forex contracts, it maintains the original contract. Rate spread has also been nullified, instead the amount of repayment installment will be defined based on the Hungarian National Bank’s (Magyar Nemzeti Bank, MNB) official exchange rates.  Antal Rogán, faction leader of Fidesz confirmed in an interview for news channel Hír TV that the Hungarian state will pay for some of the costs of transforming forex to Forint based loans.

The December conversion of loans and Friday’s law could potentially reduce individual loan burdens by 25-40%. Rogán also stated that the government will not tie loans to current exchange rates, instead a method will be devised to spread the risk between banks and state.

Photo: Tanya K.