Hungary to raise benchmark rates in order to support forint

© Scanpix/Reuters

Hungary is planning to increase its borrowing costs in order to strengthen domestic currency forint after Moody's Investors Service downgraded country's credit rating to junk. Economists surveyed by Bloomberg expect Magyar Nemzeti Bank to raise 2-week deposit rate from 6% to 6.5%. The Hungarian forint's weakness boosts payments on mortgages denominated in foreign currency accounting for 2/3 of property loans.