The government’s plan to reduce the bank levy could have a positive impact on Hungary’s sovereign rating, Reuters has quoted an analyst for Fitch Ratings as saying. “One key policy would be to reduce this tax on the banking sector and that I think would be positive for our assessment,” Arnaud Louis said. “But I would really like to wait and see what is going to happen. Because there have been some announcements in the past and we have learnt to be cautious with Hungary.” The government has signed a memorandum of understanding that outlines a gradual reduction in the levy in 2016-2018. From 2019 its scale will be “further aligned with the prevailing European Union norms”, according to the memorandum. Louis said: “Anything that could bring the bank regulatory environment more in line with best practices, increase predictability for the sector, we would see it as a positive.” Fitch Ratings affirmed Hungary’s sovereign rating at BB+, a notch below investment grade, last November. The ratings agency acknowledged a rebound in Hungary’s economic growth last year but warned that “the unpredictable business environment may affect investment in future”.