Hungary has approved a ban on mortgage lending in foreign currencies. Talk about closing the barn door after the horse is gone.
The government had no problem with consumers borrowing in Swiss francs at low interest rates when CHF/HUF was at 165. Now that it is at 215, they think its a bad idea…
Hungary announced a package of reforms a short while ago, including a bank tax. A new “precautionary” deal with the IMF is their aim, the economy minister says.
The same problem extends across central Europe where homeowners “cleverly” borrowed in Swiss to avoid high local rates.
Those homeowners are now choking, helping drive the franc ever-higher. An ugly situation that never should have been allowed to happen.
