UPDATE 2-Hungary imposes a general moratorium on loan repayments until the end of the year

* It’s time to support the economy to mitigate the impact of -PM viruses

* Loan repayments stop, tax breaks and employment rules are lightened

* The OTP of the largest Hungarian bank welcomes this decision and will support it (adds a comment from the OTP of the largest Hungarian bank)

BUDAPEST, March 18 (Reuters) – Hungarian Prime Minister Viktor Orban on Wednesday announced a general moratorium on loan repayments for all businesses and private borrowers until the end of the year to limit the economic fallout from the spread of the coronavirus.

The virus presented 56-year-old Orban with the biggest challenge of his ten-year reign, raising the specter of mass unemployment and temporary factory closures that pose the risk that the Hungarian economy will shut down.

Orban, whose unorthodox fiscal stabilization campaign after coming to power in 2010 troubled foreign investors, said the main aim of Wednesday’s measures was to protect jobs after unemployment has fallen steadily in recent years.

“Individuals and businesses, all individuals and businesses, will be exempt from principal and interest payments until the end of this year on loans taken out from today,” Orban said in a video on his Facebook page.

The announcement follows calls from the central bank, led by Gyorgy Matolcsy, Orban’s former economy minister, asking banks to voluntarily suspend loan repayments to businesses and private borrowers.

As Orban announced the decision, the Hungarian forint, which has lost more than 6% of its value against the euro this year, fell to record lows near 355.

Shares of OTP Bank, Central Europe’s largest independent lender, fell 7% on Wednesday night to their lowest level since July 2017, after reaching record levels late last year.

The Office of the Prosecutor spoke in favor of the package, saying it was ready to support the government’s effort, which would bring almost immediate relief to borrowers in the household and business sectors.

“The OTP Group is a regional company with predictable operations and significant capital and liquidity buffers,” the bank said in an emailed statement.

“The economic challenges that await us do not endanger the stable, efficient and profitable operations of the bank, which is why we wish to contribute to the extent necessary to protect the economy and our customers.”

Orban also announced new measures to defend jobs, including cuts in payroll taxes for sectors most affected, such as tourism and entertainment, among others.

The prime minister said these were the most urgent measures, but further steps to resuscitate the economy would follow almost daily. (Report from the Budapest office edited by David Goodman and Chizu Nomiyama)

Source link

About Abraham Vernon

Check Also

Beans ‘n’ Leaves tests superior hot cocoa | The dish

STATEN ISLAND, NY – Welcome back for another dose of The Dish. Watch it weekly, …

Leave a Reply

Your email address will not be published. Required fields are marked *