Hungary Gets Offer Of IMF Assistance

The agreement reached with the IMF during talks was “the last resort, the very last,” Gyurcsány said, adding that Hungary needed the IMF’s backing to show those who are attacking the country that it has strong allies. Hungary fought off the first attack of the financial crisis, but preparations must be made for long-term resistance, he added.

The technical and financial help offered by the IMF seems to have boosted confidence in Hungary and the stability of its financial markets, an analyst said yesterday as the forint and BUX index strengthened considerably.

The forint rose to near 252 per euro, while the BUX ended the day 5.6% higher, as both MOL and OTP shares rose by more than 10%. West European markets experienced significant gains yesterday.

K&H Bank analyst György Barcza noted that the government had earlier reacted more slowly than other governments in Europe, but was now doing more to secure financial stability.

Friday’s global prices were “based on the Stone Age – i.e., the complete collapse of the banking system” – but many reconsidered over the weekend and it seems that Friday was the nadir, said analyst József Miró of Erste.

The IMF offer of assistance may increase confidence in Hungary because it is essential to keep foreign investors, OTP fund manager chief István Hamecz told Magyar Nemzet. Hungary needs foreign loans because both private and state savings in Hungary are low, but debt and the budget deficit are high, he explained."

Source: Hungary Around the Clock.

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