The forint declined the most in two weeks, paring a second week of advances, on concern the euro- area debt crisis is deepening.
Hungary’s currency depreciated 0.7 percent to 286.21 per euro by 4:10 p.m. in Budapest, bringing its weekly gain to 0.6 percent. The government’s benchmark 10-year bonds slumped, lifting yields seven basis points, or 0.07 percentage point, to 7.295 percent, after hitting the lowest in 10 months yesterday.
Spain said its recession will extend into 2013 as the region of Valencia prepared to seek a government rescue and euro-area finance ministers signed off on a 100 billion-euro ($122 billion) bailout for the country’s banks. Spain’s 10-year bonds fell for a seventh day, increasing the extra yield investors demand to hold the securities instead of German bunds to the most on record.
Hungary’s government started talks on a credit line from the International Monetary Fund and the European Union this week. The international lenders disagreed with the Hungarian government’s growth forecast at the start of aid talks, chief negotiator Mihaly Varga said in an interview published in weekly Figyelo yesterday.
To contact the reporter on this story: Andras Gergely in Budapest at firstname.lastname@example.org
To contact the editor responsible for this story: Gavin Serkin at email@example.com