Hungary secretly borrowed 1 billion euros – the largest loan ever received by Budapest – from three Chinese banks. Politico reports this, citing data from the government debt agency’s website.
►Follow the Finance Ministry’s Facebook page: top financial news
The loan, provided by the China Development Bank, the Export-Import Bank of China and the Hungarian branch of the Bank of China, was fully used on April 19 and must be repaid within three years.
Budapest itself did not announce the deal. It was first reported on Thursday by Hungarian business publication Portfolio and later confirmed by a government agency.
The significant borrowing comes as Budapest tightens its ties with Beijing. According to Hungarian Foreign Minister Peter Szijjarto, Chinese companies such as electric car maker BYD and tech giant Huawei have invested around 16 billion euros in the country to date.
The new Chinese loan is the largest share of government debt, the second being a loan from China's Exim Bank for the Budapest-Belgrade railway project of $917 million (877 million euros on the day of receipt).
While Portfolio notes that the interest rate is floating, the government has not disclosed any details on the interest rate, repayment schedule or other details.
- Loans Banks
