Hungary PM expects speculative attack on forint

Budapest, December 2 (MTI) - Prime Minister Viktor Orban said on Friday that "another speculative attack" can be expected against the Hungarian currency in the second half of December.

Speaking to public radio s morning programme 180 minutes, Orban said in connection with Moody s downgrade of Hungary last week that it was "the season" for such downgrades, several EU member states are affected from time to time, and now Hungary. This is generally connected with speculative attacks, which is the case with Hungary, too, he added.

Orban said he had asked economy minister Gyorgy Matolcsy to prepare a plan for boosting growth, which should be a priority.

"If the [growth] plan is not prepared and implemented the economy could fall into recession," Orban said, adding that the plan would include concrete details on investments.

Matolcsy and central bank governor Andras Simor had met on Thursday to discuss cooperation. Orban said "in these modern times" the government and central bank were "predestined to cooperate," as the bank handled reserved which could be put into use towards inducing growth.

In response to the central bank s 50-basis-point base-rate hike earlier in the week, Orban said that he had always been opposed to hiking rates, due to their unfavourable effect on the real economy, but he accepted that it was occasionally necessary. He said he favoured cheaper loans for businesses, which can help create jobs.

Central bank hiked its base rate to 6.5 percent for the first time in nine months after Moody s downgraded Hungary s sovereign debt rating to junk status. Analysts widely agree that rate hikes could be reversed later on if Hungary manages to strike a favourable deal with the International Monetary Fund.

Asked how long talks with the IMF in which Hungary is seeking a precautionary deal could last, Orban said talks would end "as soon as we reach our goals".

As regards the weakening of the forint, Orban said "there is no one who thinks the change reflects the state of the Hungarian economy". Developments in the EU move the forint and this effects the domestic economy, he said.

Orban welcomed an agreement to pay workers a share of revenue from privatising MAV railways cargo unit as "long overdue".