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Attack on central bank governor unfavorable for markets

Markets would not welcome an attack on Hungary's independent central bank or its governor, analysts asked by MTI said on Tuesday, after leaders of opposition Fidesz, which won a landslide victory in general elections on Sunday, called for MNB governor András Simor to resign.

MKB Bank chief analyst Zsolt Kondrát said markets do not like it if a party or the government or a government that is being formed attack the central bank or its governor. He added that the forint's almost 2% weakening on Tuesday was because of renewed worries about Greek's debts, not Fidesz leaders' comments about Simor.

Both Fidesz policy experts and the central bank think further rate cuts are necessary, as does the market, Kondrát said.

Erste Bank's Zoltán Árokszállási disagreed and attributed some of the softening of the forint to the domestic matter. Uncertainties surrounding Simor will not please investors, he added. “The market considers András Simor a trustworthy person,” he said.

Fidesz head Viktor Orbán and deputy-chief Zoltán Pokorni have called for Simor's resignation over the past two days. Simor's mandate as governor runs until 2013. (MTI-Econews)