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Economy Ministry says speculations over IMF-EU talks behind forint drop

Hungary’s National Economy Ministry attributed the weakening of the forint to historical lows against the euro on Wednesday to speculation about upcoming talks with the International Monetary Fund and the European Union on financial assistance.

"It is very apparent today that the forint’s exchange rate does not reflect economic policy, but the start of negotiations in the near future with the International Monetary Fund and the European Union. A mandate for a delegation to negotiate with Hungary is on the agenda of a meeting of the IMF’s board on January 18. Until then, speculation about the talks will obviously play a decisive role in shaping the exchange rate of the forint," the ministry said.

Hungary said in November it is seeking financial assistance from the IMF and EU as a precautionary measure, allowing the country to continue to get its financing on the market.

The forint edged past 320 to the euro on Wednesday, a historical low.