Moody's: Hungary gets aid

Moody's Investors Service said it said that it expects the €20 billion package made available to Hungary by the International Monetary Fund, the European Union and the World Bank to support the government's efforts to alleviate the stress experienced in the Hungarian financial markets and strengthen the financial sector.

In Moody's view, the financial package - which reinforces the recent efforts of the Hungarian authorities and the European Central Bank to support liquidity on the country's financial markets - should ease the pressure experienced by the Hungarian banking sector in October.

Yet some of its expected benefits are likely to materialize gradually and positive rating actions are not envisaged as a direct result of this package, the agency said.

"The growth of the Hungarian banking system has been driven in recent years by strong foreign currency lending to both corporates and retail clients. At end-2007, more than 60% of all outstanding loans were denominated in foreign currencies, this percentage amounting to more than 90% for mortgage and home equity loans originated in recent years," explained Gabriel Kadasi, lead analyst at Moody's for Hungarian banks.

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