Hungarian Bonds Rebound as Cabinet Takes Time to Suit IMF Needs

Hungary’s bond yields fell from the highest in more than seven weeks as a vote on a central bank law was delayed for more time to reach a consensus with the International Monetary Fund on its content.

The government’s benchmark 10-year bonds gained, cutting yields seven basis points, or 0.07 percentage point, to 8.982 percent after closing at 9.05 percent on June 1, the highest since April 10. Hungary’s currency was little changed at 305.22 per euro by 11:16 a.m. in Budapest.

The vote on the central bank law won’t take place today as originally scheduled, state-run news service MTI said yesterday, citing Antal Rogan, head of the ruling Fidesz party’s group of lawmakers. Rogan agreed to move the vote after a request from Mihaly Varga, Hungary’s new chief negotiator, to give the government more time to agree on the necessary changes with the IMF, the European Union and the European Central Bank, MTI said. Hungary has failed to start the talks for more than six months.

“The delay in the vote provides a chance to make the law palatable for the IMF and the ECB and then the formal bailout talks can finally start,” Peter Karsai, a Budapest-based trader at Commerzbank AG, and colleagues wrote by e-mail 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