UPDATE 1-Hungary may give funds for fx loan scheme - state secretary
* Govt may have room in budget to help finance fx scheme-official
* Central bank can also participate in programme
* Hungary should issue dollar bond later this year (Adds details)
BUDAPEST, Aug 21 (Reuters) - Hungary's government may help commercial banks finance a planned scheme to help troubled foreign currency borrowers, State Secretary at the Economy Ministry Gabor Orban told the weekly newspaper Heti Valasz.
The country's mostly foreign-owned commercial banks have been worried that the programme would deepen their losses caused by earlier aid schemes and a surge in their tax burden under Prime Minister Viktor Orban's conservative government.
The government and banks are due to resume talks this week about the scheme to help families who took out Swiss franc and euro loans before the 2008 global crisis but now have to meet increased payments due to falls by the forint .
Orban said in an advanced copy of an interview obtained by Reuters that the government may have room in its budget to help finance the scheme, partly because converting foreign currency loans to forints could help the central bank reduce the costs of its own operations.
He said he was not sure that the conversion could happen at preferential exchange rates. An earlier scheme which allowed borrowers to repay their loans at preferential rates in 2011, caused big losses to banks.
He said there were scenarios in which the central bank could participate in the programme.
"Its participation could be justified again... as cutting foreign currency lending could also reduce the central bank's need to keep foreign currency reserves," he said.
Orban said the scheme could be launched this year and could be mandatory, leaving borrowers an option to stay off.
He also said that in his view Hungary should issue a dollar bond in the international market later this year. (Reporting by Sandor Peto; Editing by Andrew Heavens)
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