Friday's move by Fitch was expected – as the ratings agency cut its outlook on Hungary in November last year – and did not have a big effect on markets.
In November, Moody's became the first agency to downgrade Hungary to below investment grade, citing a weak economic outlook and lack of predictability as the main reasons.
In December, S&P cut the country's rating to "junk" citing changes to the constitution that undermined the independence of the central bank as part of the reason for the downgrade, as well as rising unpredictability in the country's economic policies.
Earlier on Friday, controversial Prime Minister Viktor Orban said both his government and the central bank want a fast deal with the International Monetary Fund.
The IMF, the EU and the ECB have criticized the Hungarian government for wanting to curb the central bank's independence.
Since coming to power in 2010, Orban's government took over private pension funds, set a fixed exchange rate for loans in foreign currency taken during the boom years before 2008 — forcing banks to take the losses due to the national currency's depreciation — and imposed the biggest tax in Europe on banks, sparking investors' protests.
Fitch said the government's policies, popular with voters but which have prompted foreign investors' fury and have attracted international criticism, were part of the reason for the downgrade.
"The downgrade of Hungary's ratings reflects further deterioration in the country's fiscal and external financing environment and growth outlook, caused in part by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF/EU deal," Matteo Napolitano, director in Fitch's Sovereign Group, said in a statement.
Fitch maintained a negative outlook for the country, saying that the policies enacted by Orban's Fidesz ruling party made it difficult for Hungary to abide by the strict conditions in an IMF loan, even if the country manages to clinch a deal with the Fund.
"Additional unorthodox policy measures have further undermined confidence in policy making," Fitch wrote in the press statement.