Forint retreats further on interbank market

MNB

The forint was trading at 306.64 to the euro late Wednesday on the interbank forex market, up from 307.83 late Tuesday. At 307.92 to the euro early Wednesday, the forint moved between 306.35 and 308.90, a six-day low.

Improved emerging market sentiment on speculation that Greece's latest debt crisis might be resolved by the end of the week helped the Hungarian currency in the afternoon, after initial falls in the morning when the National Bank of Hungary (MNB) announced another Funding for Growth Scheme, and hinted at the possibility of asset purchases in the future.

The forint course is balancing between the effects of Hungary's widening current account surplus, low need for new debt issues to replenish the treasury's deposits, talk on an expected upgrade of Hungary from junk to investment grade by rating agencies, and the up-coming quantitative easing of the ECB on the one hand, and the ups-and-downs of the situation in Greece and Ukraine, and the almost-certainty among forecasters that the MNB will resume easing in March, on the other.

The forint traded at 269.91 to the dollar, a tad down from 269.74 late Tuesday. On Wednesday, it moved between 269.33 and 271.25.

It was quoted at 286.09 to the Swiss franc, up from 287.93 late Tuesday. Its range on Wednesday was 25.69, the highest since its crash to an all-time low at 378.49 on January 15, when the Swiss central bank scrapped its cap of 1.20 to the eur, and 289.62.

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