BUDAPEST: Hungary's currency, the forint, was steady on Monday ahead of talks with the International Monetary Fund on a possible credit line and despite a third rating downgrade last week.
Early Monday, the forint traded at 314.16 to the euro, up 0.02 percent from Friday's close. Stocks were lower, however, with the Budapest BUX index 0.72 percent at 16,107 points.
On Thursday, the currency hit a historic low of 324 to the euro on fears that international lenders would refuse a bailout for Hungary, which is seeking a credit line of 15-20 billion euros ($19-25 billion)
The next day however, talks between the government and central bank governor Andras Simor raising hopes that Budapest might submit to demands from international lenders to secure a bailout boosted the forint again.
Prime Minister Viktor Orban also said in a weekend interview that Hungary was ready to start unconditional talks with the IMF.
Tamas Fellegi, Hungary's negotiator with the EU and IMF, is due to meet IMF chief Christine Lagarde in Washington on Wednesday.
Fitch became the third ratings agency to downgrade Hungary to junk status Friday, citing the government's "unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF/EU deal."
A controversial central bank reform, criticised by the IMF, the EU and the European Central Bank for limiting the institution's independence, prompted an IMF-EU mission to break off initial talks in Budapest in mid-December.
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