Hungary's external imbalances have unwound substantially since the onset of the global financial crisis. The conversion of foreign currency-denominated household mortgage debt into local currency earlier this year, combined with the government's policy of borrowing primarily in local currency, has contributed further to a reduction in Hungary's vulnerability to potential external shocks, including monetary tightening by the U.S. Federal Reserve. We are therefore raising our long-term foreign and local currency sovereign credit ratings on Hungary to 'BB+' and affirming the short-term ratings at 'B'. The outook is stable and balances our assessment of Hungary?s stabilizing economy and relatively steady headline fiscal performance against still-high general government indebtedness and generally less-predictable policymaking. On March 20, 2015, Standard&Poor's Ratings Services
