Hungarian Forint Rises to 5-Month High, Extending Weekly Gain
The currency of Hungary, the European Union’s most indebted eastern member, appreciated 0.4 percent to 289.9 per euro by 4 p.m. in Budapest, the strongest on a closing level since Sept. 27, capping this week’s 1.5 percent gain.
The MSCI Emerging Market Index rallied 1.2 percent as people familiar with the talks said European officials are considering cutting interest rates on emergency loans to Greece and using contributions from the European Central Bank to plug a new financing gap. Hungary said it has submitted responses to the European Union’s infringement procedures in three areas including monetary-policy independence.
“Local news has been positive in the past days but it is primarily the international sentiment which is moving the market, more specifically the endless Greek story,” Levente Blaho and Adam Keszeg, Budapest-based analysts at Raiffeisen Bank International AG, wrote in a research report today, commenting on the forint.
While Hungary expects further debate with the EU on its central bank law, the Cabinet is willing to compromise on the issue of the judiciary, state-run news service MTI reported late yesterday, citing Deputy Prime Minister Tibor Navracsics.
“Some very favorable news was received from Europe, particularly about the Greek rescue, that was clearly what lifted markets,” Akos Kuti, head of research at Equilor Befektetesi Zrt., a Budapest-based broker, said by telephone today. Signs that obstacles to Hungary’s own bailout will be removed also supported the rally, Kuti said.
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