Hungary Ready to Use Forex Reserves to Convert Forex Mortgages

Hungary’s central bank is ready to use part of the country’s foreign-currency reserves to help the government rid households of their costly foreign-currency mortgages, a top central bank official said over the weekend, The Wall Street Journal Emerging Europe Real Time blog reported. While ensuring that the reduction in the country’s foreign-currency reserves were gradual, the central bank would provide the foreign currency to retail banks so they could convert foreign-currency mortgages into the local currency, said Adam Balog, a deputy governor at the National Bank of Hungary. Retail banks need foreign currency to convert foreign-exchange mortgages into Hungarian forints. Should they need to tap the currency market to buy it, the Hungarian forint would likely weaken sharply. The central bank is willing to provide that foreign currency to them at market rates, Mr. Balog said. Read more. (Subscription required.)
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