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Hungary default insurance cost falls as forint firms

The cost of insuring Hungary's sovereign debt against default fell in markets in London on Wednesday as the forint strengthened. According to CMA, a market monitor that is part of S&P Capital IQ, Hungary's five-year credit default swaps (CDS) fell to around 367bp on Wednesday from 388.4bp at the previous close. Hungary's CDS spreads were over 395bp at the beginning of the week. A CDS contract valued at 367bp means that the cost to insure every €10 million worth of bond exposure against default is €367,000 a year for the benchmark five-year horizon. The forint firmed close to 300 to the euro on Wednesday. The currency weakened past the threshold early in March.