Oct. 14 (Bloomberg) -- The forint rose against the euro, heading for the best weekly gain in three months, on bets European leaders will move to resolve the debt crisis and Hungary may consider help from the International Monetary Fund.
Hungary’s currency appreciated as much as 0.7 percent and firmed 0.1 percent to 292.5 per euro by 4:48 p.m. in Budapest, extending its increase this week to 1.5 percent. That is the biggest jump since the five days through July 1 on a closing basis and the second-biggest rally among more than 20 emerging- market currencies tracked by Bloomberg, after the Polish zloty. The advance pared the forint’s loss in the second half of 2011 to 9.1 percent.
IMF officials are in Hungary at the invitation of the government to advise on an overhaul of the country’s local government system, without any talks on fresh loans, the Economy Ministry said today in an e-mail, confirming a report by Nepszabadsag.
“The news may even have a positive effect on Hungarian assets and the forint as it shows the air is not completely frozen between Hungary and the fund,” Zoltan Arokszallasi, an economist at Erste Group Bank AG in Budapest, and colleagues wrote in a research report.
Hungary, the first European Union member to get a bailout led by the IMF in 2008, broke off talks on fresh aid last year.
“Rumors that Hungary will be provided with IMF support if needed” and economic data including a rise in Hungary’s trade surplus “helped the forint rally against the euro and outperform other central European currencies,” Bartosz Pawlowski, a strategist at BNP Paribas SA in London, wrote in a research report today.
The euro headed for its biggest weekly gain versus the dollar since January as Group of 20 finance ministers start a two-day meeting today and policy makers discuss plans to tackle Europe’s debt woes.
The forint pared earlier gains after news portal hvg.hu and state-run news service MTI reported that Andras Karman, a state secretary at the Economy Ministry, will leave his government position.
Karman’s exit is a “significant blow” to the Cabinet as he is a “respected member of the economic policy team”, Timothy Ash, an economist at Royal Bank of Scotland Plc, wrote in an e-mail to clients.
--Editors: Ana Monteiro, Alex Nicholson
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