Effect of high interest rate
Hungary's high benchmark interest rate has a three-pronged impact on company's borrowings and investments depending on size and the extent of foreign ownership.
Hungary's high benchmark interest rate has a three-pronged impact on company's borrowings and investments depending on size and the extent of foreign ownership, according to a recently published survey of MKIK-GVI, the Institute for Economic and Entrepreneurial Research. Firstly, businesses, particularly those smaller in size, are increasingly turning to foreign currency loans. Secondly, the higher base rate discourages companies' current asset borrowings. It also hampers investments, again affecting primarily smaller businesses. (Vg 4) S.F.
