IMF prepares 10 billion dollar bailout as Hungary teeters!

BUDAPEST, Hungary - October 28, 2008 - Hungary's battered currency strengthened yesterday after the IMF announced that it had reached broad agreement with the Government on a rescue package to stabilize the economy. The forint has lost almost 20 per cent in the past month against the euro and the dollar.

The IMF package is likely to stave off growing fears that Hungary could be the next Iceland, with potentially catastrophic consequences across the region if an EU member state's economy was allowed to collapse. Yesterday's downgrading of Romania's debt rating to junk status did little to help.

The IMF did not disclose figures but analysts believe the rescue will involve more than $10 billion (£6.4 billion).

Dominique Strauss-Kahn, managing director of the fund, said: “The policies Hungary envisages justify an exceptional level of access to resources.”