Hungary's central bank (MNB) said that the findings of its April stress tests, which showed that domestic banks can absorb shocks from sharp gains in the Swiss franc, were still valid, reports Reuters.
The franc scaled a fresh record high at 245.73 versus the forint on Tuesday. The bank quoted Governor Andras Simor's remarks made after last week's rate decision, in response to a Reuters question about recent gains in the Swiss franc.
"In April the MNB conducted a stress test where we calculated with significantly stronger Swiss franc exchange rates: the stress test incorporated a 245 CHF/HUF exchange rate for the end of 2011 and a 257 CHF/HUF exchange rate for the end of 2012," the bank's statement citing Simor said.
"The results showed that the banking sector would be capable of absorbing the resulting losses even at these extreme exchange rate levels. So, in other words, it has adequate capital and liquidity to maintain resilience under extreme stress conditions."