Bloomberg News

Forint Gains to 10-Month High on IMF Talks, ECB: Budapest Mover

July 27, 2012

The forint advanced to the strongest in 10 months, capping a third week of gains, as Hungary ended the first round of aid talks and bets grew the euro area debt crisis will ease.

Hungary’s currency appreciated 1 percent to 280.95 by 4:38 p.m. in Budapest, the strongest since Sept. 12. The government’s benchmark 10-year bonds strengthened for a second day, cutting yields nine basis points, or 0.09 percentage point, to 7.476 percent.

The International Monetary Fund wrapped up a week of “constructive” loan talks in Budapest, the Washington-based lender said in an e-mailed statement yesterday. European shares climbed and the euro strengthened after Le Monde reported that the European Central Bank is preparing to buy securities of the region’s most indebted economies and German Chancellor Angela Merkel and French President Francois Hollande said they would do anything to protect the euro. ECB President Mario Draghi yesterday pledged to defend the euro.

“The external environment took a sharp turn on the ECB president’s comments, then the market bought into the IMF statement on the week spent here,” Levente Blaho and Adam Keszeg, Budapest-based analysts at Raiffeisen Bank International AG (RBI), wrote in a research report today.

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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