Hungary could seek IMF package similar to Romania's

Analysis

Hungary's government could be seeking a credit package from the International Monetary Fund and the European Union that is similar to one Romania got in March 2011, daily Népszabadság said on Monday. Hungary started negotiations with the IMF/EU on the precautionary financial assistance late in July.

Sources with knowledge of the negotiations told the paper that the European Commission is drawing up an agreement of a precautionary nature, while the IMF is continuing to offer a precautionary Stand-By Arrangement.

The IMF said earlier it would negotiate with Hungary on a Stand-By Arrangement (SBA) but acknowledged that the country would treat the credit as precautionary.

The paper noted that Romania got a 24-month €3.5 billion precautionary SBA from the IMF late in March 2011. The country's authorities said they did not plan to draw under the arrangement.

"SBAs may be provided on a precautionary basis -- where countries choose not to draw upon approved amounts but retain the option to do so if conditions deteriorate," according to the IMF's descriptions of its existing credit arrangements.

SBAs address short-term balance of payment problems and disbursements are conditional on achieving targets designed to address these problems, the SBA description notes.

ADVERTISEMENT

1,072 new COVID cases registered in last 3 days Figures

1,072 new COVID cases registered in last 3 days

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

BFK developing regional cycling strategy City

BFK developing regional cycling strategy

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.