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Forint weakens against euro as investors weigh “crisis taxes”

The forint traded at 274.08 to the euro late Thursday, weakening from 272.98 a day earlier as market players weighed the possible effects of “crisis taxes” announced by the government late Wednesday.

Prime Minister Viktor Orbán said on Wednesday that the government would levy extraordinary taxes on energy companies, telecommunications companies and retail chains for three years, generating a combined HUF 161 billion in annual budget revenue. He also said the government would suspend payments to mandatory private pension funds from November 1, 2010 until the end of 2011. Payments into the funds come to about HUF 30 billion a month.

The forint traded at 194.52 to the dollar late Thursday, firming from 195.93 on Wednesday.

On the secondary market for government securities, benchmark yields rose 25-29bp for terms over a year. (MTI-Econews)