Hungary may lose Ft 1.62 trn as political unrest damages economy
„The strategic investors that are already here are waiting on the sidelines to see if this insecurity will end within days or weeks,” he said. „This is about whether these companies will reinvest their profit generated in Hungary or if they will chose to take it to other countries.” While bond and currency investors are unlikely to sell their holdings, the increased instability may force the central bank to further raise its benchmark interest to keep Hungarian assets attractive, according to Kóka. The country's main interest rate is already the EU's highest at 7.75%. „It can cost the majority of the savings from the austerity measures if the destabilization has to be offset with rate increases,” he said. Regardless of the events, Kóka reiterated that the government will carry out the budget plan as approved by the European Union. (Bloomberg)
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