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Hungary may face further downgrades, rate hike, Morgan Stanley says

Hungary's downgrade to non-investment grade, or "junk", remains a possibility as the rating agencies are "not impressed" by the government's actions against the private pension funds, Morgan Stanley said. A reversal of the planned pension reforms and concerns over the sustainability of Hungary's public finances may prompt further downgrades, it said. In other news, the New York-based financial services firm said Hungary may continue to raise interest rates because of accelerating inflation, said. Hungary's national bank MNB on January 24 raised the benchmark rate by a quarter point for a third consecutive month, to 6%, after inflation accelerated to a six-month high in December.