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Hungary Central Bank Says to Suspend Mortgage Bond Purchases

Dec. 6 (Bloomberg) -- The Hungarian central bank said it will terminate its forint-denominated mortgage bond purchases because of the low level of issuance on the primary market.

The Magyar Nemzeti Bank said on Feb. 8 it would buy forint mortgage debt to reduce premiums and help lenders offer cheaper credit in local currency. The bank planned to buy back mortgage notes of as much as 100 billion forint ($474 million) in face value by Dec. 31.

The central bank has purchased 7 billion forint worth of debt since February on the primary mortgage market and 30 billion forint worth of notes on the secondary market, the bank said in a statement posted on its website today.

The central bank is ready to restart mortgage bond purchases if forint-based lending recovers and lenders improve their asset maturity, according to the statement.

To contact the reporter on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editor responsible for this story: James Gomez at jagomez@bloomberg.net

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