Hungary plans to extend the scope of a bill originally aimed at aiding borrowers holding $15 billion in household foreign-currency mortgages, following a top court ruling that said many of these loans had unfair terms.
Hungary’s quest to regain its investment credit grade fell short as Fitch Ratings kept the country in junk status, citing the level of government debt and concern that an economic recovery will run out of steam.
The forint rose to the strongest in a month after Standard & Poor’s raised the outlook for Hungary’s junk-rated sovereign debt to stable from negative on accelerating growth and an improving current-account balance.
The forint advanced the most in more than a week after a report showed Hungary’s economy accelerated at the fastest pace in seven years, easing the need for the central bank to take more steps to boost the recovery.
Hungarian Prime Minister Viktor Orban swept local balloting yesterday, freeing him from electoral pressures until 2014. Now he can turn his attention to budget concern that has put the country’s credit-rating at risk.
Hungary’s central bank won’t return to cutting interest rates “any time soon” because of the nation’s increasing risk premium and inflation outlook, said analysts at 4Cast Ltd., Erste Group Bank AG, Concorde Securities and Citigroup Inc.
The International Monetary Fund “needs to change its position” on Hungary’s budget gap, which may be twice the target approved by the lender for this year, said Mihaly Varga , an economy official in the new government.