More of Hungary's Debt Should be Based on Forint, PM Asserts

        Hungary's public debt, which is about 40% denominated in foreign currencies, mostly the euro, should gradually become more forint-based, the country's prime minister said Sunday in a radio interview.
        In reaction to the forint's prompt depreciation last Thursday versus core currencies when the Swiss National Bank lifted its cap on the franc-euro exchange rate, Prime Minister Viktor Orban said "it would be better for the country if the smallest possible ratio of the public debt was foreign-currency-based. We would like to carry on decreasing this ratio."
        The government intends to increasingly count on Hungarian citizens when it needs to renew its maturing foreign currency debt, the premier added.
        Hungary's public debt stood at 80.3% of gross domestic product at the end of September, central bank data show.
        In the wake of the Swiss franc's strengthening against the forint, Mr. Orban praised the government and the central bank about the decision on a scheme to fix the exchange rate on retail borrowers" foreign currency mortgage loans versus the forint. This scheme helped ease risks related to Hungary's Swiss franc-denominated retail loans.
        Not all debtors are relieved, however: consumer loans, mainly those taken out to finance cars, are still an issue, although a much smaller one than mortgage loans.
        The government won't lend a helping hand to these debtors, Mr. Orban said. "Banks and borrowers will have to negotiate. the government can't offer a solution here."
        Mr. Orban noted the courts have said borrowers had to bear the exchange-rate risk on loans.
        Write to Veronika Gulyas at veronika.gulyas@wsj.com
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        (END) Dow Jones Newswires

        January 18, 2015 20:10 ET (01:10 GMT)

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