The European Union and the International Monetary Fund have both decided to introduce measures aimed at boosting the Hungarian economy and ensuring that one of Eastern Europe’s largest markets is shielded from the worst impact of the current global financial crisis.

Hungary’s Socialist government commented that the financial deal being offered by these Western organizations—which includes a sizeable loan—is “of convincing size and force.”

Shortly after the deal was announced, the value of the Hungarian forint—the country’s national currency—rose sharply on the market, from a low of 285 per euro last week, closer to 270 forints earlier today.

The European Union alone is expected to provide Hungary with €5 billion in funding, while the IMF has spoken simply of a “substantial package.”

Hungary has thus far avoided the banking crisis that enveloped many western countries, and the aim of these two packages is to ensure that a high degree of liquidity remains.

It is also important that the value of the Hungarian forint stabilize, which fell over 30 percent against the US dollar and euro in the past two weeks, due to speculation, mainly because most Hungarians have taken up loans in Swiss francs and Euros in the past two years.

The forint’s decline, however, meant that purchasing real estate with foreign currency in Hungary became much less expensive.

In fact, even if the forint stabilizes at around 271 per euro, this will still be a much better exchange rate for foreigners looking to do business in Hungary than the 245 level which characterized the forint-euro exchange this past spring.