There is no fundamental reason for the weakening of the forint, National Bank of Hungary (MNB) governor András Simor said after the forint weakened sharply late Thursday and early Friday. The forint corrects Friday afternoon.
The MNB is closely watching market developments and the forint’s rate, Simor said. If it deems it necessary, the bank will use the tools at its disposal. Asked whether the bank plans an extraordinary rate meeting, Simor said “in an extraordinary situation, one neither takes nor promises anything.”
After weakening as far as 272 to the euro early in the morning on Friday, the forint corrected to trade at 265.50/266.00 around 09:00 after verbal intervention by the National Bank of Hungary. The forint was still markedly weaker than its rate of around 257 late Thursday and its rate of around 253 late Wednesday.
The forint corrected to trade at 195.50/196.00 to the dollar around 09:00 after trading over 200 earlier in the morning. The forint’s rate against the dollar was around 185 late Thursday. Turnover on the interbank forex market was heavy early in the morning. On the forint market, O/N rates were at 7.50/60%, well under the 8.50% central bank base rate. On the secondary market for government securities, liquidity dried up and no deals were made.
FORINT CORRECTS FURTHER
The forint traded as strong as 261 during the day, traders said. The forint traded at 193.50/70 to the dollar in the afternoon. It traded between 192.00 and 201.40 to the dollar during the day. Traders said they saw no sign of intervention purchases by the National Bank of Hungary. (MTI-Econews)