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Forint firms below 234 against Swiss franc

The forint traded at 233.76 to the Swiss franc late Wednesday, firming from 235.83 on Tuesday.

The forint weakened sharply, past 241.50, in the morning, after global investors expressed disappointment with measures announced by the Swiss National Bank to stem the firming of the overvalued franc.

But it corrected later and also got a boost on Prime Minister Viktor Orbán’s expression of continued commitment to achieving the fiscal deficit target and reducing state debt in spite of the crisis in the eurozone and slowing economic growth.

A sharp firming of the Swiss franc last week was a cause for concern in Hungary because much of the retail lending stock of the country's banks is denominated in CHF. The forint reached a historical low of 273.43 against the Swiss franc one week ago.

Stress tests conducted by the National Bank of Hungary last October showed the country's banking system was resilient enough to withstand a strengthening of the Swiss franc to HUF 245 at the end of 2011 and to HUF 257 at the end of 2012.

The forint traded at 268.72 to the euro late Wednesday, strengthening from 269.45 on Tuesday.

The forint gained to 185.54 from 187.13 against the dollar.

On the secondary market for government securities, benchmark yields were down 26-28bp for terms over a year.