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Dollar bond buyback had no ʼtangibleʼ effect on exchange rates

The governmentʼs repurchase before maturity of USD 1bn in dollar bonds had a negligible impact on exchange rates, Gergely Gulyas, the head of the Prime Ministerʼs Office, said at a regular press briefing on Thursday, state news wire MTI reports.

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The dollar bond buyback "in and of itself had no tangible effect on exchange rates", Gulyás said, fielding a question.

The Government Debt Management Agency (ÁKK) wound up the repurchase of the high-yield bonds on January 27, paying for the securities with existing forint and FX liquidity. On the same day, the forint weakened as far as 338.74 to the euro, reaching a new historical low.

Gulyás stressed the positive impact of cutting the share of Hungaryʼs state debt in foreign currency, reducing the countryʼs external vulnerability.