Moody's cuts Hungary rating to non-investment grade

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Source: Reuters

Ratings agency Moody's cut Hungary's government bond rating by one notch to Ba1, below investment-grade with a negative outlook hours after rival Standard & Poor's held fire on a flagged downgrade on news of planned talks on international aid.

Hungary returned to the International Monetary Fund and the European Union last week after the forint currency fell to record lows against the euro in the wake of a warning by S&P that Hungary could lose its investment-grade credit score.

The cut by Moody's could renew pressure on the forint -- which closed at 312.37 versus the euro on Thursday -- when domestic markets reopen, and may push government bond yields further up from 2-1/2-year highs above 8 percent.

The forint hit a record low at 317.90 versus the euro on Nov. 14, according to Reuters data.

Read more: http://www.reuters.com/article/2011/11/25/hungary-moodys-idUSL5E7MO4JA20111125