Hungary tightens bank forex funding rules

The Central Bank of Hungary

The Central Bank of Hungary (CBH) this week tightened foreign currency funding rules in a bid to decrease the country's foreign reserve requirements and reduce risk in the banking system.

The measures aim to smooth out maturity mismatches between long-term, foreign-currency loans and the short-term funding used by banks to finance them. The majority of Hungarian household loans are tied to the Swiss franc and euro, and have long-term maturities.

The rules state that banks will have to swap short

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