Hungarian defence (Swiss franc variation)

23 October 2008 By Ian Campbell

The country s central bank has raised interest rates by three percentage points to defend the forint. Even with aid from the IMF, the defence looks inadequate. After years of heedless borrowing, Hungary s external financing needs are too great. The endgame is likely to be ugly.

This content is for Subscribers only

Context News

The Hungarian central bank raised its benchmark interest rate by 3 percentage points to 11.5% after an unscheduled meeting on Wednesday to try to defend the currency, the forint. The forint fell to 283 versus the euro on October 22, from 228 in July.

The European Central Bank said on Thursday that it would lend the Hungarian central bank up to 5 billion euros to support the the provision of euro liquidity in Hungary.

Gordon Bajnai, the Hungarian economy minister, said on Monday that it was a joke to compare Hungary to Iceland . He said that Hungary was piling up such a huge amount of cash that it was not worth it to attack Hungary .

Email a friend

Please complete the form below.

Required fields *