Hungary’s foreign currency reserves drop

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Hungary’s foreign currency reserves have fallen by 12% between December and January.

According to the latest figures from the country’s central bank, foreign currency reserves fell to €31.1 billion at the end of January. This figure has dropped from €35.1 billion at the end of December.

The Magyar Nemzeti Bank reported that total reserves in Hungary have dropped to €37.3 billion from €37.8 billion over the same period.

The country is not in a positive position for potential investors as the business climate has also deteriorated in the three months up to January.

According to the Thomson Reuters & OeKB Central and Eastern European Business Climate index of foreign direct investors, Hungary has slipped for the third consecutive quarter. The country now holds 14 points compared to 17 in October.

The index suggests that Hungary is “dragging down the average for the European Union’s developing eastern economies.”

Hungary has the lowest points for the region and business expectations are negative overall. Damaged by the Euro-zone debt crisis, the Hungarian economic outlook for the next 12 months may get worse. This will drive its financial markets lower, threatening to ‘derail’ talks on the EU and IMF support.

"Business expectations deteriorated sharply as well, not least due to the Hungarian government's controversial measures such as the foreign currency law or the launch of special taxes for certain sectors including banks, energy and trade," the report stated.

Transfer Money to Hungary

If you are thinking about investing in Hungary, it is definitely a good idea to consider the logistics of transferring money abroad. Foreign currency exchange rates quoted by banks are usually worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money to Hungary (which is inevitable if you are looking to make a property investment) be sure to compare the market before you buy your overseas currency.

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