CB to work out ideas for commercial banks on euro

HUNGARY - The National Bank of Hungary (MNB) is preparing recommendations to commercial banks regarding the introduction of euro coins and notes in 12 EU member states as of 1 January 2002, MNB spokesperson Gabor Missura said.

The non-obligatory recommendations would advise commercial banks not to open foreign currency accounts after 1 August 2001 in currencies that will be replaced by the euro. In addition, the MNB will recommend that banks convert such existing foreign currency accounts to euros starting in the third quarter, and consolidate separate accounts in different currencies to a single euro account. The central bank is currently consulting with banks' representatives on the possible terms of these recommendations, the MNB official said. In addition, a mandatory MNB order, to be issued in late summer, will require commercial banks to provide for the conversion of outgoing currencies through 15 February. Hungarian commercial banks will receive euro notes and coins at the beginning of December at the earliest, according to Missura. Hungarian households had HUF 760 billion in foreign currency holdings at the end of May, according to the MNB.