The forint slumped, extending the longest streak of depreciation in more than a year, as the European debt crisis worsened and Hungary struggled to start talks on a bailout.
Hungary’s currency dropped 0.3 percent to 298.8 per euro by 9:39 a.m. in Budapest in a sixth day of losses, the longest such streak since April 2011. A close at that level would result in a weekly slide of 3.1 percent, the most among more than 20 emerging-market currencies tracked by Bloomberg.
Demand for riskier assets fell after Moody’s Investors Service lowered debt ratings at 16 Spanish banks, while Fitch Ratings cut Greece’s credit rating on concern the country may be unable to sustain euro membership. Hungary is yet to start aid negotiations six months after Prime Minister Viktor Orban’s Cabinet asked the International Monetary Fund for help because he has yet to implement all amendments to a central bank law.
“The Greek turmoil is still the key for global capital markets and the increasing speculation whether they’ll exit the euro zone,” Levente Blaho and Adam Keszeg, analysts at Raiffeisen Bank International AG (RBI), wrote in a research report today. “The forint has become a regional underperformer, it is the most exposed to international events.”
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