Forint set for weekly gain as foreigners buy Hungarian bonds

MNB

Hungary's forint is set for a weekly gain as investors buy the currency to purchase Hungarian government bonds, the highest yielding in the European Union.

The forint is the second best performer this week among the 71 currencies tracked by Bloomberg, following the Slovak koruna. Both countries offer higher returns from investing in local currency government bonds than German debt. The forint reached its highest in eight months versus the euro this week as inflation, the fastest in the European Union, quickened to a two- year peak last month. “The forint gained as people are buying high-yielding currencies,” said Barbara Nestor, an emerging markets strategist at Commerzbank AG in London. “And the yields in Slovakia and Hungary are fairly attractive.” Against the euro, the forint rose 1.1% on the week to 257.57 at 10:32 a.m. in Budapest. It may reach 257 next week, Nestor said. Annual inflation was 6.3%, the highest since October 2004, compared with 5.9% in September. The forint has gained 3% in the past six months as Hungary's inflation rate has almost tripled, exerting pressure on the central bank to raise rates for a sixth time since June. The foreign holding of Hungarian debt rose by 1% in the past week to a total 2.8 trillion forint, according to the government's Debt Management Agency. The Hungarian benchmark ten year government bond yields 315 basis points more than similar maturity German government debt. A basis point is 0.01 percentage point. (Bloomberg)

ADVERTISEMENT

Varga puts 2021 GDP growth at 7-7.5% Analysis

Varga puts 2021 GDP growth at 7-7.5%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New managing director at the helm of Wolt Hungary Appointments

New managing director at the helm of Wolt Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

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.