March 19, 2013 / 9:17 PM / 7 years ago

Moody's downgrades four Hungarian banks

March 19 (Reuters) - Moody’s Investors Service said on Wednesday it downgraded the ratings of four Hungarian banks, citing a weak economic environment in the country.

The credit rating agency lowered baseline credit assessments (BCA) between two to four notches for Budapest Bank, K&H Bank , Erste Bank Hungary and MKB Bank .

In February Moody’s said it was keeping its ‘junk’ rating of Ba1 on Hungary’s debt and maintaining a negative outlook, blaming the country’s weak growth outlook.

Wednesday’s actions conclude Moody’s review for a downgrade initiated in December.

Investors in Hungary have been unnerved by frequent and unpredictable changes in policy as premier Viktor Orban has used his huge parliamentary majority to rewrite the constitution and major laws in ways critics have said could weaken democracy.

The Hungarian central bank has cut interest rates by 175 basis points since August.

The central bank is due to meet next week to discuss interest rates under a new governor, former Economy Minister Gyorgy Matolcsy.

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