Hungarians under pressure from CHF

Melinda Nagy, a Hungarian special education teacher who knows little about financial markets, has started to lose sleep over exchange rates.

Nagy’s payments on her Swiss-franc denominated mortgage almost doubled after the Hungarian forint dropped 35 percent since 2008 against the Alpine nation’s currency, forcing her to clean houses and work at a chicken ranch to avoid foreclosure.

“I’d rather burn my house down than give it back to the bank,” said Nagy, 43, who lives in the eastern Hungarian city of Hatvan. “What’s the difference if I go to jail or become homeless?”

The amount of franc-denominated mortgages in Hungary surged to 2.2 trillion forint ($10.2 billion) in May from 133.8 billion forint at the start of 2005, according to central bank data. Non-performing loans at local lenders such as OTP Bank Nyrt, Erste Group Bank AG and Foldhitel es Jelzalogbank Nyrt may rise to as much as 10 percent of total loans by the end of the year, said Tamas Erdei, president of the Budapest-based Banking Association.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell