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Hungarian Banks Seek Lower Tax in Trade for Loan Plan, HVG Says

Nov. 28 (Bloomberg) -- Hungarian banks are asking the government to lower a special tax levied on lenders in exchange for swallowing losses on foreign-currency loans, news website hvg.hu said, citing unidentified bankers with knowledge of the proposal.

Lenders are seeking to write off one-third of their losses stemming from a plan that allows early repayment of foreign-currency mortgages at below-market exchange rates from a special banking-industry tax, the news website said. They also want a government guarantee the repayment plan won’t be extended beyond the Dec. 31 deadline and the Cabinet won’t implement new measures boosting banks’ losses, hvg.hu said.

Banks are also proposing a conversion of overdue foreign currency loans to forint overdue more than 90 days and mitigating losses by purchasing euros from the central bank reserves, the news portal said.

A plan allowing borrowers to repay their mortgages at set exchange rates for a limited period of time should be extended and made more flexible to allow more households to take advantage of it, according to hvg.hu.

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

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

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