Fitch Not In Hurry To Upgrade Hungary’s Sovereign Credit Rating
Fitch Ratings affirmed Hungary’s “BB plus” sovereign credit rating, one notch under investment grade, with “positive” outlook, in a scheduled review Friday evening. After the publication of Fitch Rating’s review, the Hungarian forint was at 310.50 to the euro after 310.51 previously on the interbank forex market. Just before the warning of the economy minister, the forint strengthened to 308.86 to the euro, an almost onemonth high, on upgrade talk. Fitch revised the outlook on its Hungary rating to “positive” from “stable” on May 22.
Earlier most analysts expected an upgrade to “BBB minus”, the bottom of investment grade, however, Hungary’s Economy Ministry played down the chance for “a major change” in this year. Credit rating agencies may decide to upgrade Hungary’s sovereign rating in 2015, Ágnes Hornung, a state secretary at Ministry, told public television in response to Fitch’s review. Hornung said on news channel M1 that countries with a “positive” outlook generally see a rating upgrade within twelve months, thus an upgrade for Hungary could come next year. Ágnes Hornung added that Fitch had said Hungary, along with Portugal, were the two countries closest to upgrades.
ING’s chief analyst András Balatoni told news agency MTI that the big rating agencies were being too conservative and too pessimistic – especially in the case of Hungary – unlike before the crisis, when they were overly optimistic. Fitch said an upgrade hinges on more stable, predictable economic policy, maintaining the external balance and a further decline in public debt, all areas in which progress is being made, Balatoni said, adding that an upgrade could come early in 2016. Takarébank analyst Gergely Suppan said Fitch’s decision not to upgrade Hungary’s sovereign rating on Friday was “a bit disappointing”, but added that rating could be bumped up in the first half of next year, especially considering the outlook is “positive”.