BUDAPEST: Hungary’s government announced plans to convert consumer and car loans to forint, pushing forward with its pledge to free households from foreign-currency debt after tackling mortgages.
Banks will convert as much as 305 billion forint ($1.1 billion) in loans at Wednesday’s market rates with borrowers receiving 31 billion forint in subsidies on the new loans, Economy Minister Mihaly Varga told reporters in Budapest. Lenders and the government will equally share the costs of the subsidy, he said.
The conversion of as many as 229,000 mostly Swiss-franc denominated loans follows a similar move for mortgages last year. The government is seeking to ease the burden on households after the forint’s 37 percent decline against the franc since the beginning of 2010 raised installments and increased the share of loans in arrears.
