Bloomberg News

Forint Gains to Six-Week High as Government Accepts Law Changes

June 20, 2012

The forint rose to the strongest in six weeks after the central bank said the government accepted the recommendations of international lenders regarding a disputed law blocking aid talks.

Hungary’s currency appreciated 0.4 percent to 286.6 per euro by 4:45 p.m. in Budapest, the strongest since May 8. The cost of insuring Hungarian bonds with credit-default swaps for five years fell two basis points, or 0.02 percentage point, to 534 basis points, data compiled by Bloomberg show.

Prime Minister Viktor Orban’s government accepted recommendations by the International Monetary Fund, the European Commission and the European Central Bank on legal changes necessary for aid talks to begin, the Magyar Nemzeti Bank said in an e-mail today. Lawmakers may approve the amendments within two weeks, state news service MTI reported, citing Mihaly Varga, the government’s chief negotiator.

“News out of Hungary will be positive in next few weeks, suggesting that Hungary will outperform on foreign-currency” markets, Luis Costa, a London-based emerging-market strategist at Citigroup Inc., wrote in an e-mail today, referring to the planned approval of the central bank law.

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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