Hungary is freezing some budget expenditures and is ready to take further steps, including raising Europe’s highest bank levy, to exit the European Union’s budget monitoring and remove the threat of funding cuts.
Hungary’s central bank will start a 500 billion-forint ($2.1 billion) program to boost lending to help end a recession and plans to use foreign-currency reserves to cut the country’s short-term external debt. The forint rose.
Hungary plans no “dramatic” measures to help foreign-currency borrowers, the acting head of the banking lobby said as investors seek clarity amid an overhaul of policy making leadership and a weakening forint.
Hungary’s central bank, roiled by divisions among policy makers, cut the European Union’s highest benchmark rate for a fifth month as policy makers shrugged off the forint’s plunge to a five-month low.
Hungarians returned Viktor Orban to power after eight years in opposition, giving the Fidesz leader a two-thirds majority in parliament, allowing him to change the recession-hit country’s Constitution.