Dec. 12 (Bloomberg) -- Hungary’s central bank accepted 320 million euros ($425 million) in foreign-currency swap bids from local lenders in November to ease pressure on the forint arising from a mortgage-repayment plan.
The Magyar Nemzeti Bank paid out 291 million euros to credit institutions, the central bank said in a summary of last month’s transactions that were posted on its website today.
The government is forcing commercial banks to swallow exchange-rate losses on foreign currency denominated mortgages by giving the option for borrowers to repay their loans in a lump sum at below-market rates. Two-thirds of housing loans are denominated in foreign currencies, mostly in Swiss francs.
The central bank is allowing domestic lenders to tap its foreign currency reserves to cope with an expected increase in demand for Swiss francs and euro. The offer is aimed at easing depreciation pressures on the forint, which fell to a record-low against the euro last month and is the worst-performing currency in the world in the second half of this year.
--Editors: Zoltan Simon, Balazs Penz
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