ADVERTISEMENT

Forint falls on interbank market

History

The forint was trading at 313.90 to the euro late Tuesday on the interbank forex market, down from final quotes at 312.92 on Monday. At 312.84 to the euro early Tuesday, the forint moved between 312.63 and 314.16, a four-week low, after a one-week high at 308.95 late last Friday.

The Hungarian currency took a dive on Tuesday on concern lending incentives the National Bank of Hungary (MNB) unveiled in the afternoon might tend to weaken it as the program aims at increasing money supply, could trim forex reserves, and lure demand from government bonds by establishing a preferential central bank deposit facility for participating banks.

The pogramme also promises to water down capital requirements for participating banks, while it threatened others with registering them on a list of non-participating banks. "Passive" banks should not receive a cut in Hungaryʼs bank tax, MNBʼs Deputy Governor Marton Nagy said later, despite that under a February deal with Erste Bank and the European Bank

for Reconstruction and Development (EBRD), Hungary has already passed legislation to lower the special and exorbitant special bank levy in force since 2011 gradually from next year with no strings attached.

In a latest turn in the tension between Hungary and Western EU peers over the refugee crisis, Austrian chancellor Werner Faymann repeated on Tuesday the forint-negative idea earlier heard from German government and European Commission members that member states which do not participate in the EUʼs refugee absorption scheme should count with financial consequences, probably in terms of curbed EU funds.

The Hungarian government cut the offer of three-month Treasury bills at the regular auction on Tuesday despite rising demand. Yield rose compared to both the previous auction and the secondary market benchmark.

The forint traded at 286.67 to the dollar, down from final quotes at 284.02 on Monday. On Tuesday, it moved between 283.67 and 287.01, a more than three-month low, after a one-week high at 280.05 last Friday, and a previous nearly three-month low at 286.69 late last Wednesday.

It was quoted at 289.20 to the Swiss franc, down from 287.80 late Monday. Its range on Tuesday was 287.60 to 289.51, an almost two-week low, after a more than two-week high at 283.59 last Friday. Since its crash to an all-time low at 378.49 to the franc on January 15 when the Swiss central bank scrapped its cap of 1.20 to the euro, it reached the highest at 281.07 on February 26.

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Transformation Delineation - Microsoft country general manag... Podcasts

Transformation Delineation - Microsoft country general manag...

Most districts not planning mandatory vaccination at kinderg... City

Most districts not planning mandatory vaccination at kinderg...

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.