Forint corrects down on interbank market
The forint was trading at 310.54 to the euro late Tuesday on the interbank forex market, down from final quotes at 309.86 on Monday. At 310.07 to the euro early Tuesday, the forint moved between 309.79 and 312.11, after an almost three-week high at 309.18 late Monday.
Central European currencies retreated as weak Chinese imports data, a plunge of oil prices and a ZEW survey on declining investors confidence in Germany resurrected concerns over global growth, causing risk aversion.
Not even a falling dollar could prop up the forint on its way to lose the previous three daysʼ gains versus the euro as speculation returned, also weighing on financial assets in the region, that a conversion of Swiss franc loans in Poland after elections there on October 25 could cause further losses to banks.
Hungarian sovereign yields rose all over the curve in the secondary market on Tuesday.
Also Tuesday, the Hungarian government sold HUF 17 bln of three-month Treasury bills at an auction, HUF 3 bln less than planned, with rising yield despite growing demand. Auction yield jumped 11 bps to 0.54% from a week ago, while secondary market yield on the three-month tenor increased 3 bps on the day to 0.63%.
Earlier, the three-month yieldʼs fall to a record low of 0.35% triggered the National Bank of Hungary (MNB) to lower its overnight deposit rate to 0.1% from 0.35% in September in an effort to keep funds streaming into government debt from central bank instruments, but apparently a sovereign yield rise is achievable only through narrowing offer which might be counterproductive in view of the governmentʼs growing financing needs.
The Hungarian financial authoritiesʼ intention, reiterated on Tuesday by the deputy head of the central bank, to alter a February agreement with EBRD in order to make the decrease of the special bank levy, already stamped in law, conditional on more bank lending to companies also weighed on the forint.
The forint traded at 273.07 to the dollar, down from 272.88 in final quotes on Monday. On Tuesday, it moved between 272.38 and 274.17, after a more than three-week high at 271.96 late Monday, and a four-day low at 280.36 last week Tuesday intraday.
It was quoted at 284.48 to the Swiss franc, down from 283.57 late Monday. Its range on Tuesday was 283.11, an early morning repeat of a three-week high first attained on Monday, to 286.49, a four-day low. 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.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
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.