Orbán: Exchange rates not gov’t area (Also: Forint down again)

Pharma

Governments must distance themselves from public debate on the matter of exchange rates, even at a time when the rates on emerging markets are volatile, Prime Minister Viktor Orbán said at a National Bank of Hungary (MNB) conference today.

Exchange rates are solely in the sphere of influence of central banks, Orbán said, adding that “the government can only pursue an economic policy that allows exchange rate stability and maintains a favorable trade balance.”

Orbán noted that there would be no “election budget” in 2014 and the fiscal deficit would remain under the 3%-of-GDP European Union threshold, while Hungary’s sizable trade surplus continues to support economic stability.

New low for forint exchange rate
Meanwhile, the forint weakened further early in the afternoon on Friday in continuing its week-long downward trend. The national currency weakened dropped from around HUF 311 to the euro at noon CET to HUF 314.05 – another two-year low – some 40 minutes later.

In a radio interview this morning, Orbán stated the reasons for the forint’s recent volatility were externally based.

-- David Landry contributed to this article

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