Moody's Investors Service lowered Hungary's government bond ratings and the country's foreign currency bank deposit ceiling to Baa1 from A3, and gave a negative outlook for the rating. The firm said the action reflects the impact of the current economic crisis on the Hungarian government's financial strength.

Moody's noted that given the size of the external financing needs of the economy, and its dependence on external support to meet its needs, Hungary was particularly exposed to the current economic downturn. Hungary is also hampered by its limited fiscal and monetary policy adjustments, due to exchange rate weakness and adversely affected debt metrics.

Meanwhile, Moody's downgraded Hungary's foreign currency bond ceiling to Aa2 from Aa1, giving a stable outlook. However, Moody's retained the rating and outlook on the local currency bond ceiling at Aaa along with a stable outlook.

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