Forint gains in tight range
The forint was trading at 306.61 to the euro late Wednesday on the interbank forex market, up from 307.66 late Tuesday. At 307.59 to the euro early Wednesday, the forint moved between 306.45 and 307.80. Regional currencies, including the forint, and government bonds were mostly treading water ahead of third quarter European GDP data releases scheduled for Friday.
"The record-low inflation environment in most Central European markets is more or less 'accepted' by market participants, so what really will shape the (base) rate outlook is the strength of economic growth," Raiffeisen said in a note on Wednesday.
The forint was also underpinned by hints in the economic press at possible tools the government might use to reduce public debt on its books by year-end to comply with EU rules, and by the Hungarian central bank's latest Financial Stability Report, which lowered the effective net loss estimate for Hungary's banks resulting from retail debtor relief legislation compared to earlier estimates of total gross cost. The central bank also outlined some details of its planned agency which would buy up distressed assets from banks at a discount.
The forint traded at 245.88 to the dollar, up from 246.62 late Tuesday. On Wednesday, it moved between 245.59 and 247.50. Last Friday it hit a third nearly three-year low in as many days at 250.78. It was quoted at 255.06 to the Swiss franc, up from 255.68 late Tuesday. Its range on Wednesday was 254.97 to 255.98.
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