Standard & Poor's , one of the top three global ratings agencies, announced on Wednesday that it had cut Hungary's sovereign credit rating to "junk" status, saying it doubts the government's policy "predictability".
S&P also lowered the country's long-and short-term foreign- and local-currency sovereign credit ratings by one notch to BB+ from BBB, reported Xinhua.
The ratings agency said in a note that the downgrade reflects their opinion that "the predictability and credibility of Hungary's policy framework continues to weaken, harming Hungary's medium-term growth prospects".
The Hungarian government is seeking to introduce a central bank law, which the European Union and International Monetary Fund take as to reduce central bank independence and increase parliament's influence in setting interest rates.
According to European Commission's forecast last month, Hungary would have the highest debt level and lowest economic growth rate among the EU's eastern members next year.
In late November, another major ratings agency Moody's had also downgraded Hungary's credit ratings, while Fitch Ratings currently has Hungary holding the lowest-possible investment-grade rating.