Hungary Squeeze Deepens as Swiss Fail to Stem Franc Rally

Swiss efforts to weaken the franc may not be enough to fend off threats to Hungary’s economy from homeowners and local governments that borrowed in the Alpine country’s currency.

With two-thirds of Hungarian mortgages held in francs to escape local interest rates, the Swiss currency’s 16 percent surge against the forint in the past month threatens to squeeze consumers. The cost of protecting Hungary’s sovereign debt from default rose the most in the past month among 20 emerging-market countries tracked by Bloomberg.