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Analysts said the move had weakened the forint, the Hungarian currency, and undermined investor confidence.
But then the Hungarian currency plunged, causing Mr. Zsoter's monthly payment to almost double.
The doomsday oratory dragged down the forint, the Hungarian currency, and the euro.
The Hungarian currency, at one time printed in denominations of quintillions, regularly lost two-thirds of its value overnight.
Analysts said the main worries about Mr. Matolcsy were that he could prove overly aggressive in using monetary policy to devalue the forint, the Hungarian currency.
The Hungarian currency, the forint, plunged after several government leaders warned that the Hungarian economy was in bad shape and that debt default was a possibility.
Similar(43)
The potential for a rolling emerging market currency collapse brought on by runs against the Argentinian, Turkish and Hungarian currencies, which in global GDP terms do not amount to a hill of beans, plus a new Italian government crisis.
During the second half of the 19th century, an early forward market had developed in Vienna to deal with the unstable behaviour of the Austrian-Hungarian currency, which was effectively on a flexible exchange rate until the 1890s (Flandreau and Komlos 2006).
And Hungarians with foreign currency loans knew what that felt like: at times their loan repayments rose by 10% or 20% in a single month.
"I saw them from the Italian lira to Spanish pesetas to Hungarian and Mexican currencies, from dollars to the English pound".
A book called Learn to Play the Hungarian Way had much currency.
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