Investors have thrown their weight behind the Hungarian government, generating ample demand for a sovereign bond issue in U.S. dollars and buying more government bonds in forints than were offered. The solid investor showing comes on hopes the country will revamp its budget, despite warnings from a rating agency that such hopes may prove premature.

A prominent government official, meanwhile, confirmed the government’s commitment to implementing the planned budget savings as well as to lowering inflation, which has been in doubt recently.

Hungary is rated by all three major rating agencies one notch from junk status   thus the success of the bond sales is a major victory for the government, which has heard many bitter words about its market-unfriendly economic policy. Read More »