Costlier euro funding: where the ECB’s rate move reaches Hungarian firms

On September 10, the ECB decided to raise interest rates by 25 basis points. Its deposit facility rate became 2.50% on September 16. This is context for the September decision, rather than another rate change announced today.

For a Hungarian company, the first question is not where its headquarters are, but the currency and terms of its financing. With a floating-rate euro loan, the next reference-rate reset may matter. With fixed-rate borrowing, the cost of new funding or refinancing at maturity can change instead. The central bank’s rate is not the total borrowing cost of either contract.

Revenue matters too. An exporter invoicing in euros and a business earning mainly forints carry different currency exposures against identical euro debts. Exchange rates and interest rates therefore need separate examination; a change in one does not establish the next move in the other.

Useful checks include the repricing date, credit spread, hedging terms and distribution of maturities. These allow a specific exposure assessment before the next policy decision. A single central bank statement cannot establish a certain path for the euro or a particular company’s profits.