Matolcsy: Forint's drop not a Hungarian problem

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There is no special Hungarian story behind the latest weakening of the forint, and the central bank's international reserves provide appropriate protection, central bank chief György Matolcsy said today at a joint press conference with Hungary’s Prime Minister Viktor Orbán. The National Bank of Hungary (MNB) has no exchange rate target and is not compelled to intervene to stop the currency's weakening, Matolcsy added.

Matolcsy said he believes that there is no need to worry as the forint rate is moving along with that of the Polish currency. In fact, he said, Hungary has excellent economic indicators and has successfully reduced and will soon eliminate its vulnerability from foreign currency loans.

According to Matolcsy, the MNB does not have an exchange rate target and its only anchor is its mid-term inflation target, therefore, the central bank is not compelled to intervene to stop the currency's weakening.

In apparent fallout from troubles with the Russian ruble, the forint traded close to record lows, at 314.266 to the euro just after 10am on the interbank forint market, weakening further from 313.19 late Wednesday. The forint traded at 254.93 to the dollar, also softening further from 252.43 late in the previous day. It was quoted at 260.965 to the Swiss franc compared to 260.91.

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