Hungary’s centre-left Socialist government, led by Prime Minister Ferenc Gyurcsány, has announced that it will be implementing key measures aimed that limiting the fall out of the global financial and banking crisis in this Central European country.

Although Hungary’s economy has posted modest growth in the past several years, and while the government has been highly successful in reducing the nation’s deficit—and even surpassing expectations in this regard—the fact that up to 90 percent of all private bank loans and mortgages have been taken up in foreign currencies puts a burden on the system.

Most Hungarians who took up loans to buy a new car, or a mortgage for a new home did so not in forints, but rather in Swiss francs or in euros.

The main problem for those who took up loans is that the value of the Hungarian forint against both the euro and the US dollar has dropped signifcantly over the past week. While one euro was worth around 250 forints at the beginning of the month, it now stands at 270 forints.

This may serve as good news for foreign investors who will be able to buy more for their money, but it places a burden on those who took up loans in other currencies.

Prime Minister Gyurcsány’s response is to provide relief for those who find themselves in this predicament. The goal will be to decrease the risk associated with the fluctuating exchange rate.

The government will make public its proposals next week. Hungarian political leaders from all parties—including those in opposition, which hold the majority in parliament—will meet this weekend to present a united front in the face of the current global crisis.