According to a source, Hungary plans to sell bonds in dollars with maturities of seven and 12 years and in euros with maturities of nine years in the near future. The sales are to be organized by BNP Paribas, Deutsche Bank, Goldman Sachs Group, ING Groep and JPMorgan Chase & Co.
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The potential proceeds are to help close the holes in the Hungarian budget, which caused generous social spending before the April elections. Orbán won the election again, leaving his fifth term in office.
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Hungary currently does not have access to 7.2 billion euros (178.14 billion CZK) from EU pandemic funds. This is due to Brussels’ fears of weakening the rule of law and corruption.
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Orbán announced extensive plans to consolidate the budget due to financial problems over the weekend. These include government spending cuts and savings of $ 6 billion ($ 139.1 billion) and extraordinary taxes for various sectors, from energy banking.
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Other Central and Eastern European countries, such as Poland and Croatia, have turned to international markets in recent weeks. Foreign financing is a cheaper option for regional countries, because after a series of rising interest rates to alleviate high inflation, these countries are facing growth in domestic currency bond yields.
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Hungary has raised its foreign bond sales target for this year by € 2.5 billion to € 5.1 billion. After the sale of bonds in yen in February, he has to sell bonds worth 4.5 billion euros this year. The yield on the Hungarian ten-year forint bond is now around 7.2 percent.
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