devizabeállítású

Devizabeállítású is a Hungarian term that translates to "foreign currency denominated" or "foreign currency denominated". It refers to a financial product or agreement where the value, repayment, or principal amount is linked to a foreign currency. This is commonly seen in loans, mortgages, bonds, and some savings accounts.

When a loan is devizabeállítású, the borrower receives the loan in local currency, but the amount due for repayment, including interest and principal, is calculated based on the exchange rate of a specified foreign currency. For example, a loan might be denominated in euros (EUR) even if it is disbursed in Hungarian Forints (HUF). This means that if the HUF weakens against the EUR, the borrower will owe more in HUF terms to repay the same EUR amount. Conversely, if the HUF strengthens, the repayment amount in HUF will decrease.

These financial instruments were particularly prevalent in Hungary during certain economic periods, offering potentially lower initial interest rates compared to local currency loans. However, they also carry significant exchange rate risk for the borrower. The value of the debt can fluctuate considerably based on currency movements, potentially leading to unexpected increases in repayment obligations. Regulatory changes and economic conditions have influenced the prevalence and terms of devizabeállítású products over time. Understanding the specific foreign currency and the exchange rate mechanisms is crucial for anyone entering into such an agreement.