Minister György Matolcsy | MTI / László Beliczay

Hungary seeks new IMF deal

November 18, 2011

Hungary expects to sign a new agreement with the International Monetary Fund (IMF) and the EU early next year, the country's Economy Ministry said on Friday. Hungary, in a reversal of policy, wants to see the IMF act as an "insurance".

The Hungarian Ministry of National Economy says it wants an agrement which will not reduce - as it claims the previous deal did - but increase its financial-economic sovereignty,

Its statement says "the government has started talks with the IMF and the EU about a new agreement that, instead of austerity measures, will aid Hungary's economic growth."

However, the European Union said that although, it was aware of Hungary's plans to ask for help but had not yet received a formal request. Also, IMF's representative in Hungary, Iryna Ivaschenko, said that the team in Budapest was conducting a "regular review", which was "not a negotiating mission".
The Ministry's statement marks a reversal in policy. As recently as Monday, Economy Minister György Matolcsy referred to IMF by saying that "this three-letter institution is opposed to every single one of our steps".
However, the Hungarian currency, the forint, has fallen to a record low against the euro this week and government bond yields have soared, while two ratings agencies have warned that Hungary could lose its investment-grade credit rating due to its weak growth outlook and unpredictable policy track.


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