Forint down on Swiss exchange rate cap removal


The forint was trading at 321.20 to the euro late Thursday on the interbank forex market, down from 319.65 late Wednesday. At 319.79 to the euro early Thursday, the forint moved between 318.68 and 327.62, an all-time low.

After an initial shock following the Swiss National Bank's surprise removal of its 1.2 francs to the euro exchange cap in force since end-2011 the Hungarian currency recuperated much of its intraday loss as both the government and analysts said that an appreciation of the Swiss franc could have only limited impact on Hungary through forex debts.

Hungary now basically has no risky foreign currency exposure, with banks having already covered their exposure in foreign currency through the central bank which provided forex funds at rates fixed in November for the need of converting forex home loans into forint debts, household mortgage debtors pay instalments at the fixed rate since the beginning of this year ahead of the conversion slated for February 1, and small enterprises have also had the opportunity to exchange their forex loans to forints in the central bank's lending for growth programme. Amid the current very low inflationary environment the franc's rise could even be good for Hungary's economy, boosting exports, ING said.

Erste Group's Hungarian business will not be affected by the Swiss central bank's decision earlier Thursday to scrap its policy of capping the Swiss franc to the euro, as the Hungarian government had already set the exchange rate for Swiss franc-denominated mortgage loans in Hungary at HUF 256.5, and at HUF 309.5 for those denominated in euro, a spokeswoman for Erste said on Thursday.

Hungary's decision to fix the repayment exchange rate of household foreign currency mortgages was "justified," the Economy Ministry said on Thursday. The ministry said the exchange rate moves since the fixing of repayment levels in December would have pushed households' debt servicing costs more than half a trillion forints higher. It added that the rise of the franc did not have a substantial impact on state debt levels.

The forint traded at 276.81 to the dollar, down from 271.13 late Wednesday. On Thursday, it moved between 270.76 and 280.33, an all-time low. It was quoted at 305.95 to the Swiss franc, down from 265.54 late Wednesday. Its range on Thursday was 265.37 to 378.49, an all-time low.

Serbia Inflation Close to 3-year Low in May Figures

Serbia Inflation Close to 3-year Low in May

Karácsony Calls for Budapest Mayoral Election Repeat Elections

Karácsony Calls for Budapest Mayoral Election Repeat

2 Major Ground Handlers at Budapest Airport Join Forces Transport

2 Major Ground Handlers at Budapest Airport Join Forces

Summer Camp Prices Have Increased 10-15% Tourism

Summer Camp Prices Have Increased 10-15%


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
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.