Corporate sector currency mismatch in Hungary

Our analysis of micro data shows that the size of unhedged foreign currency lending has become significant not just in the household sector, but in the corporate sector as well. The weight of foreign currency debtors without net foreign currency income was significant prior to the crisis. During the crisis - as a result of the exchange rate depreciation - the performance of foreign currency debtors was worse in relative terms. There was a greater increase in their probability of default and a stronger fall in their investment, while their access to the loan market also deteriorated more.