"Moody’s has cut Hungary’s debt rating to below investment-grade, or “junk,” status, the agency announced late Thursday. The credit-rating agency revised Hungary’s rating downwards one notch to “Ba1” from “Baa3”, while affirming its negative outlook.In justifying its decision, Moody’s cited uncertainty surrounding the government’s ability to meet the medium-term targets of its fiscal and public debt reduction plans, compounded by impaired growth prospects, news website Origo reports.
Hungary has become vulnerable to risks coming from the European debt crisis, given its high debt burden and exposure to external financing needs, the agency said.
Rival ratings agency Standard & Poor’s (S&P) announced earlier Thursday that it will keep Hungary’s credit rating on hold at BBB-, one notch above “junk” status, while maintaining a negative outlook.
Only the announcement of renewed talks with the IMF has helped Hungary to avoid a downgrade by S&P, according to Index.
It was rumoured earlier this month that S&P would cut Hungary’s rating after it placed the country on a negative watch, news website Index writes.
The agency will assess the progress of talks with the IMF and the EU and is unlikely to decide on its next move before the end of February, Népszabadság adds.
S&P also named predictability and credibility of economic policy as factors it watches.
The early repayment of foreign-currency mortgages poses risks to growth as banks could cut lending, S&P warned."
Source: Hungary Around the Clock
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25.11.2011