Poor US labor market data published last week and figures that show a sharp drop in industrial output in the central- and east-European region are likely to cause the forint to weaken to 275-283 to the euro in the coming days, Takarékbank analyst Gergely Suppan told MTI on Monday.
The forint weakened to around 280 to the euro early Monday from 276.65/85 on Friday. Turnover was low, dealers said. Other currencies in the region are weakening, and the drop in production because of the halting of Russian gas deliveries makes the situation worse, Suppan said.
In spite of the forint’s weakening, Suppan said the National Bank of Hungary could reduce the base rate by 50bp from 10.00% without worry in January. Average annual inflation can still fall to 2.8% in 2009 at the forint’s current exchange rate, he added.
A visit to Budapest by IMF Managing Director Dominique Strauss-Kahn on Tuesday will most likely include discussion about Hungary’s bank rescue package, Suppan said. Strauss-Kahn will visit Budapest on Tuesday in order to review the utilization of a $15.7 billion economic-support package that the organization provided to Hungary in December, MTI reported late on Friday evening.
Market players attributed a weakening of the forint on Thursday and Friday to speculation the IMF is dissatisfied with the progress of the measures the government said it would take as conditions for a $15.7 billion economic support package promised Hungary in October. (MTI-Econews)