Moodys cuts Hungary close to junk

Todays downgrade is primarily driven by the Hungarian governments gradual but significant loss of financial strength, Moodys Investors Service analyst Dietmar Hornung said in a statement. The negative outlook reflects the uncertainties regarding the governments fiscal strength,as the countrys structural budget deficit is set to increase and external vulnerabilities make the country susceptible to event risk.

Hungarian assets have been hit in the last month as the spreading euro debt crisis has driven a decline in global appetite for risk.