"Hungary will meet its undertaken international obligations," Reuters cited Orbán as telling a press conference in Budapest after a summit of the Visegrad Four (V4) countries.

"That is what I can do in the interest of markets. (They shall) use it as they see fit. I do not wish to interfere in the question of the markets. They react however they react, he added.

He reminded that the loan agreement signed between the International Monetary Fund and Hungary in 2008 expires in October this year, but stressed that it does not say how the deficit target must be reached.

"There is a single fact registered in this agreement, namely that Hungary must have a budget deficit of 3.8% (of GDP) in 2010. Aside from this, on every other issue, the talks between the IMF and Hungary have no bearing. Our agreement says nothing about how we should achieve this target. This is our exclusive national responsibility, the selection and timing of tools," Orbán said.

The PM’s remarks point in the same direction as the comments made by Economy Minister György Matolcsy yesterday, namely that the government is committed to achieving the deficit goal(s). We pointed out on Monday with respect to Matolcsy’s remarks that the ruling Fidesz party is apparently willing to concede to the IMF’s terms as for the original deficit goals, after which the only clarification needed will be how exactly it wants to do that. The PM’s words underpin this assumption.

Following the report on Orbán’s comments, the forint firmed to 288.70 to the euro from 290.50 previously, while global investor sentiment remains rather dim. Since then it has returned to around 290.

Note that the HUF appreciated while sentiment was not too rosy. Leading European stock indices are down by about 1% and the euro shed nearly 1% against the dollar in a matter of one hour."

Source: Portfolio Online Financial Journal