Hungarian Forint Rises to 5-Week High on Europe Debt Optimism

The forint appreciated for a second day after posting the biggest weekly advance in more than two years last week on speculation European leaders will take steps to stop the spread of the region’s debt crisis.

Hungary’s currency strengthened 1.2 percent to 299.85 per euro, the strongest on a closing level since Oct. 27. The BUX index of shares advanced 1.7 percent to 17,745.74 as Mol Nyrt., the country’s biggest refiner, jumped 3.3 percent by the close in Budapest.

Italian Prime Minister Mario Monti today introduced a 30 billion-euro ($40 billion) package of austerity and growth measures to trim the euro-region’s second-biggest debt and prevent Italy from sparking the euro’s breakup. Hungary, the European Union’s most-indebted eastern member, last month asked for fresh assistance from the International Monetary Fund amid what Prime Minister Viktor Orban called a ‘‘speculative attack’’ on the forint.

“Risk appetite is growing amid the improving international sentiment, which can also be seen in the forint’s gains,” Peter Karsai, a Budapest-based trader at Commerzbank AG, and colleagues, wrote in an e-mail today. “Monti’s so-called rescue package seems to be convincing.”

The government’s 10-year bonds rallied for a fourth day, cutting the yield 13 basis points to 8.39 percent, according to generic prices compiled by Bloomberg.

The cost of insuring against a default on Hungary’s bonds with credit-default swaps fell to 548 basis points from 561 basis points on Dec. 2.

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