Moody's reduced Hungary's government bond rating to below investment grade, from Baa3 to Ba1. Rival ratings agency Standard and Poor's has not downgraded Hungary saying they will wait until talks with the EU and IMF have finished.

Moody's has blamed high debt levels and serious doubts about the country's ability to meet targets for growth and spending for the downgrade. The Hungarian government responded by deeming the downgrade professionally unfounded and part of a series of financial attacks on the country, provoked by what has been called “unorthodox” policy. The economy ministry remains optimistic saying, “In the past year-and-a-half there has been an expressly favourable change in most areas of the Hungarian economy".

Hungary was the first country to receive an EU bailout with a 20 billion euro IMF/EU loan back in 2008, and the Hungarian forint has been the world's worst performing currency against the euro over the last six months, dropping 15 percent and hitting a record low 317.92 to the euro on November 14. Today (November 25) the forint lost 1.5 percent  and was trading at 316.25 per euro at 9:56 am.

editor@romania-insider.com