Hungarian Forint Foreign Exchange

 

Hungarian forint’s foreign exchange rate gains on IMF bailout hopes

Published on January 18, 2012 by   ·   No Comments

The Hungarian forint’s foreign exchange rate gained for a second day and Hungarian bonds rallied on speculation the government will accept conditions imposed by the European Union and the IMF in return for another bailout.

Hungary’s currency appreciated as much as 1.5 percent and traded 0.9 percent higher at 306.5 per euro by 10:04 a.m. in Budapest. A close at that level would be the strongest since Dec. 27. The government’s benchmark 10-year bonds rallied for the first time in four days, cutting the yield 13 basis points, or 0.13 percentage point, to 9.651 percent.

The European Union yesterday threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country. Hungary is ready to comply with demands from the European Union over the central bank, Bild reported, citing an interview with Orban.

“The prime minister told the foreign press that all will be fine with the legislation which had been criticised, and that caused the rally,” Miklos Kolba, the Budapest-based head of foreign currency trading at ING Groep NV (INGA), said in comments sent by e-mail.

Orban is scheduled to speak at the European Parliament today. He has asked to speak to defend the country against “lies and groundless accusations,” his spokesman, Peter Szijjarto, said in a statement on Jan. 16.

“We will bow to power, not to the arguments,” Orban told Bild in the interview.

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