Forint slips against Swiss franc after SNB announcement

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The forint weakened past 242 to the Swiss franc early Wednesday from 235.83 late Tuesday after markets were disappointed with measures the Swiss National Bank (SNB) said it would take to weaken the franc.

The SNB said early Wednesday it would take steps to cause the franc to weaken as well as boost market liquidity, but it did not go as far as pegging the currency to the euro as many investors had hoped.

The franc firmed against the euro after the announcement.

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 245 forints at the end of 2011 and to 257 forints at the end of 2012.

The forint weakened to 272.30 to the euro on the SNB's announcement from 269.45 late Tuesday.

The forint slipped to around 190 to the dollar from 187.13 late Tuesday.

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