Breaking news in Budapest

Reuters stirred up a hornet’s nest in Hungary’s last week, posing questions to the central bank which got some startling responses and forced Bloomberg to run a pick-up sourced to Reuters. It said Hungary may need the financial safety net of the IMF if global investor sentiment turned more negative, which it said was not unlikely — a direct contradiction of the government’s stance after it walked away from the Fund in the summer. Hungary’s plight is being worsened by the strength of the Swiss franc which many Hungarian home loans have been borrowed in; the central bank said the franc’s climb posed a real threat. (see graphic of Swiss franc/forint) Our story prompted a “central bank told Reuters” pick-up by Bloomberg an hour later. Two days later, Hungary’s economy minister said the central bank should start buying bonds as others have to ease the country’s situation. It is likely to refuse.