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By Carolyn Cohn
LONDON, March 3 (Reuters) - The current low level of the forint is a cause for concern if it remains so for a long period, Hungary's economy minister said on Tuesday. "There is a level of currency weakness already which could be a concern. If the current level... remained long-term, that would be obviously a concern," Gordon Bajnai told Reuters in an interview following an investor presentation here.
"This level is already fundamentally not realistic."
The forint is trading close to recent record lows against the euro
Investors in the developed world are taking a close look at the worsening fortunes of eastern Europe, with many western banks heavily exposed to the region.
Hungarian businesses and consumers have been hard-hit by the weakness of the forint, as many have loans denominated in foreign currencies such as the euro.
Bajnai said Hungary would not consider capital controls to stem flight from its currency, as some emerging economies are starting to impose as a result of the global financial crisis.
"'Capital controls' is a a dangerous term," he said.
Hungary last week called for shortening the two-year rule in the Exchange Rate Mechanism 2 to bring the EU's eastern members under the euro currency shield more quickly, to protect them from the global financial crisis.
Bajnai said the Hungarian government would set out plans for Hungary's euro entry by the end of September.
"Our policy is to have (euro introduction) as soon as possible, but also as competitive as necessary."
EU leaders last weekend rejected Hungary's calls for a 180 billion euro ($227.7 billion) aid package to rescue eastern European economies, but Bajnai said the idea was not dead.
"At least the proposal got onto the table, certain elements should remain for consideration," he said.
"If the problem is international, then the national answer is not enough."
He said Hungary, which has benefited from a $25.1 billion rescue package led by the International Monetary Fund, was not proposing an EU-led aid package out of self-interest.
"Hungary was not speaking for itself -- we are trying to deal with this at a European level."
(Additional reporting by Mike Roddy; Editing by Ron Askew)