About HUF 524.6 bln, or nearly 28%, of the increase resulted from the weakening of the forint. Excluding the forint’s weakening, gross central budget debt rose HUF 1.3 trillion or 6.2%, during the period.
The forint weakened 5.7% to the euro between the end of 2013 and 2014. The official fixing of the National Bank of Hungary (MNB) was HUF 314.89 on December 31, 2014.
About HUF 401.7 bln, or 21%, of the increase reflected the takeover of debt from municipalities in February. The debt takeover raised central budget debt but did not affect consolidated state debt as debt of local councils fell by a similar amount.
Central budget gross debt differs from Maastricht gross consolidated government debt in that it does not include the position of local councils and is calculated at market prices.
Hungary is required by European Union rules to reduce its consolidated state debt as a percentage of GDP. And it has to cut consolidated state debt, excluding exchange rate changes, under its constitution.
The ÁKK debt figure includes mark-to-market deposits related to FX swaps transactions made to reduce partner risks. These deposits rose by HUF 193 bln between the end of 2013 and 2014 because of the significant cross-rate changes during the period.
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