Fitch links Hungary rating to IMF talks

Ratings

Ratings agency Fitch said it was unlikely to change Hungary’s credit rating until it has more information on the outcome of the country’s talks with the International Monetary Fund about a credit line, Reuters reported on Wednesday.

"Hungary faces a pretty demanding external refinancing schedule next year and the year after...," Matteo Napolitano, leading analyst at Fitch told Reuters in an interview authorised for release on Wednesday.

"Therefore the kind of IMF backstop, if Hungary would for any reason be shut off from the international bond market, would have to be substantial and large enough to substitute for the market," he added.

Fitch cut the outlook on Hungary’s sovereign rating to negative early in November, citing "a sharp deterioration in the external growth and financing environment" and adding that a government scheme allowing early repayment of foreign currency-denominated mortgages at discounted exchange rates had "dented foreign investor confidence".

About a week later, Hungary’s government announced it was seeking financial assistance from the IMF and EU as a precautionary measure.

Fitch rates Hungary a notch above "junk".

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