Forex loans helped Hungarian firms invest more - until the forint fell in the ‘great recession'

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Foreign currency-denominated loans to Hungarian corporates fed higher investment rates before the crisis, a new paper has found, but during the crisis, firms with higher levels of forex-denominated loans invested less due to the balance sheet effects of a depreciating forint.

In Corporate foreign currency borrowing and investment: the case of Hungary, Marianna Endrész and Péter Harasztosi examine whether forex lending contributed to larger investment by lowering user cost and easing liquidity

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