7 Jan 2012

Credit rating cut by agency

2:24 pm on 7 January 2012

Fitch has followed Moody's and Standard & Poor's in doing so.

Another ratings agency has cut Hungary's credit rating to junk status.

Fitch blames "unorthodox policies" for its decision to cut the rating from BBB- to BB+.

The government has been accused of undermining the central bank's independence and imposing losses on the country's foreign-owned banks.

The BBC reports Hungary is attempting to resolve a stand-off with the International Monetary Fund over a new loan facility.

An earlier IMF/EU loan saved the country from financial collapse in 2008.

Moody's and Standard & Poor's also cut their ratings for Hungary to junk levels recently.

The forint currency has tumbled in recent months. On Thursday the government failed to sell its targeted amount in a treasury bill auction.

Almost five billion euros worth of external debt is due to roll over in 2012. Foreign investors hold almost 3.8 trillion forints ($US16.53 billion) worth of bonds.