Bloomberg News

Forint Caps Biggest 2-Day Drop in Two Weeks on Europe Concern

July 23, 2012

The forint had the biggest two-day decline in more than two weeks on concern the European debt crisis is deepening.

The currency of Hungary, the European Union’s most indebted eastern member, depreciated 0.6 percent to 287.87 per euro by 5:06 p.m. in Budapest, bringing its loss in the past two days to 1.3 percent, the most since the two days through July 6. The benchmark BUX stock index slipped 2.3 percent to 16,956.07, the most since June 25.

Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- are due to arrive in Athens tomorrow amid doubts the country will meet its commitments and reluctance among euro-area states to put up more funds should it fail. Six Spanish regions may ask for aid from the central government, El Pais reported. Spain and Italy reinstated a short-sale ban on stocks as bank shares plunged.

“The resurfacing of the Greek euro exit scenario and the concern over the Spanish regions also depressed sentiment on the forint market, the Hungarian currency has markedly weakened over the past two days,” Levente Blaho and Adam Keszeg, analysts at Raiffeisen Bank International AG (RBI), wrote in a research report today.

Hungary is due to complete the first round of talks on a bailout from the International Monetary Fund and the European Union this week.

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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