Budapest - The Hungarian forint fell to a record low of 312 against the euro on Wednesday morning, heightening concern over Hungary's ability to meet its external debt obligations and putting further pressure on Hungarians with foreign currency loans.

Finance Minister Janos Veres sought to dismiss fears that Hungary was on the brink of a sovereign default, saying that its central bank has over 20 billion euros (25 billion dollars) in its foreign currency reserves.

Veres told the local news agency MTI that the further weakening of the Hungarian currency reflects a lack of confidence in the Central and Eastern European (CEE) region as a whole, not "domestic fundamentals."

"There is no reason for any kind of uncertainty over this question," Veres said.

The weakening of the forint is having a direct effect on tens of thousands of ordinary Hungarians, who after years of spending fuelled by low-interest loans in Swiss francs and euros have seen mortgage repayments balloon by as much as fifty per cent since last summer.

With bank credit drying up, Prime Minister Ferenc Gyurcsany has written to European Commission President Jose Manuel Barroso and the current EU President Mirek Topolanek, MTI reported.

In a bid to mitigate the effects of the economic downturn, Gyurcsany called for the European Central Bank to accept as collateral bonds issued by non-eurozone countries.

The Hungarian premier was rebuffed by the EU on Sunday when he called for a 190-billion-euro (240-billion-dollar) "European Stabilization and Integration Programme" for the formerly communist CEE region.

Countries whose economies are not so perilously overstretched, such as Slovakia, Poland and the Czech Republic, protested at being lumped in with the economic black sheep Hungary and Latvia, fearing that worried investors might pull their capital out the whole region.

On Wednesday, the financial supervisory authorities from Bulgaria, the Czech Republic, Poland, Slovakia and Romania issued a joint statement through the Committee of European Banking Supervisors (CEBS) warning of the effect that wild talk about impending financial collapse in the region can have on national economies.

Analysts said the fact that Hungary was left out of the latest statement had contributed to Wednesday's sharp fall in the value of the forint on Wednesday morning. Hungary's state financial watchdog added its name to the statement later in the day. (dpa)