Hungary will seek buyers this week for Euro 1 billion of bonds three months after the currency devaluation and as the budget deficit grows.

The forint's fixed rate was cut in June, only to be defended within a week by raising interest rates. Since the middle of this year “the market has really started to lose patience” with Hungary, said Philip Poole, director of emerging markets in London at ING Bank.

The bond issue will be Hungary's second foreign-currency bond issue of the year and the proceeds will be used to refinance debts due to expire in 2003 and 2004.

Morgan Stanley and UBS Investment Bank are managing the issue.

(BBJ 16.ix.03)