National Bank of Hungary Sets Foreign Currency Balance Indicator For Banks
- 31 Jul 2015 9:00 AM
The National Bank of Hungary (NBH) will require banks to have a foreign currency balance indicator (DEM) of maximum 0.15 starting from January 1, 2016, according to a decree by the governor of the NBH published in the Thursday issue of the official gazette Magyar Közlöny. DEM for banks will be calculated based on the balance of foreign currency assets and liabilities divided by total assets.
The introduction of DEM and the tightening of rules for banks’ foreign currency compliance will reduce the bank sector’s dependence on shortterm foreign liabilities and thereby the country’s vulnerability, NBH said earlier in July.
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