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Hungarian report Hungarian report
by Euro Reporter
2012-10-12 10:45:01
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Hungary inflation rate rises to 4-year high amid rate clash

Hungarian inflation, the fastest in the European Union, accelerated in September to the quickest in more than four years as central bankers debate the merits of cutting the benchmark interest rate further.  The inflation rate rose to 6.6 percent, the highest since July 2008, from 6 percent in August, the statistics office in Budapest said today. That compares with the 6.3 percent median estimate of 14 economists in a Bloomberg survey. Prices advanced 0.4 percent in a month.

The Magyar Nemzeti Bank cut its benchmark two-week deposit rate to 6.5 percent from 6.75 percent on Sept. 25, the second quarter-point cut in as many months, as policy makers focused on a recession that deepened in the second quarter, rather than on price growth. The decisions polarized the Monetary Council as the four non-executive members outvoted central bank President Andras Simor and his two deputies both times.

“The central bank is unlikely to be deterred from further rate cuts as inflation isn’t the primary focus, it’s more about growth and risk premium,” Sandor Jobbagy, a Budapest-based economist at Intesa Sanpaolo SpA’s CIB Bank unit, said by phone.  The forint has gained 11.6 percent against the euro this year, the world’s best performance, on investor confidence that the government will obtain a loan from the International Monetary Fund to ease fiscal-policy concerns and financing risks. It traded at 282.16 per euro by 11:36 a.m. in Budapest.

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Hungary to launch new euro bond mainly to retail buyers

Hungary plans to launch a new three-year euro-denominated government bond with a floating interest rate aimed primarily at ordinary Hungarians, the government debt management agency (AKK) said on Thursday. Budapest, still wrangling with the International Monetary Fund over a financing deal that analysts say is needed to bring its borrowing costs back down to manageable levels, has not tapped international markets so far this year.

The AKK said it planned to sell 200-300 million Euros worth of new bonds initially and the new paper, which will be added to a range of forint government securities already available to domestic retail buyers, would be launched in the coming weeks. The new bond will pay a 2.5 percent premium above the average euro zone inflation rate published by Eurostat, the AKK said, adding that the bonds would not replace normal foreign currency bond issuance aimed at international capital markets.

"The AKK targets primarily retail buyers with the new government paper, but it also intends to give a possibility to corporate buyers as well to buy the papers," the AKK said. AKK officials reiterated that the government planned to tap international markets only after a deal is reached with the IMF and European Union.

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European court of Human Rights to examine Hungary’s church law

The Strasbourg Court of Human Rights has sent its questions regarding Hungary’s church laws to the Hungarian government and started to examine the legislation, news website index.hu said on Wednesday. Several religious organisations have turned to Strasbourg over the new laws which have reduced the number of recognised churches in Hungary. The Court had asked the government to state whether rights to a free practice of religion had been infringed in connection with the new law. Index.hu said altogether 17 organisations that lost their church status as a result of the law have turned to the Court. The Strasbourg Court of Human Rights has sent its questions regarding Hungary’s church laws to the Hungarian government and started to examine the legislation, news website index.hu said on Wednesday.

Several religious organisations have turned to Strasbourg over the new laws which have reduced the number of recognised churches in Hungary. The Court had asked the government to state whether rights to a free practice of religion had been infringed in connection with the new law. Index.hu said altogether 17 organisations that lost their church status as a result of the law have turned to the Court. The Human Resources Ministry told MTI in a statement on Wednesday that the Strasbourg court expected an answer from Hungary until January 23 next year. Contrary to press reports, one of the aims of the Hungarian church law was to eliminate abuse of a church status, rooted in a law from 1990, under which any organisation applying for a church status was automatically granted the title, the statement said.

It added that the ministry continued to be open for dialogue with religious organisations.  According to the ministry, the Hungarian legislation is “one of the most generous” such laws in Europe, which does not curb religious freedom and “maintains the religious diversity of Hungarian society”. Hungary’s parliament passed the church law on December 30 last year. The number of religious organisations with church status dropped from over 300 to 14, index.hu said. The law had been axed by the Constitutional Court in December last year for procedural reasons, but parliament reopened it for debate and passed essentially the same law at an extraordinary session at the end of the year.



      
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