Fitch cut Hungary’s current rating from BBB+ to BBB
After cutting the rating outlook from stable to negative in the middle of October, this morning the Fitch credit rating agency announced that they cut the rating of Hungary’s sovereign debt from BBB+ to BBB, with stable outlook. The agency said that in the case of Hungary “the downgrade reflects the severity of the recession and post-crisis correction to macroeconomic imbalances and associated risks to the public finances and from foreign currency mismatches in the private sector," However, the IMF-led package of support has largely removed external financing and liquidity risks, supporting Fitch's stable outlook.
After today’s Fitch downgrade, Hungary’s A3 rating at the Moody’s has again become two notches higher than the Fitch’s new rating of BBB.
As for the third credit rating agency, Hungary’s rating stands at BBB+, with negative outlook at the S&P. Thus, similar step from their side can not be excluded in the near period.
Market reaction: the forint weakened, stands now closer to the level of 270 EURHUF.
