Jan. 8 (Bloomberg) -- The forint, the world’s second-best performing currency in 2012, will extend gains as Hungary prevents its budget deficit from widening and the central bank slows interest-rate cuts, according to CIB Bank Zrt.
The forint appreciated 8.1 percent in 2012, the biggest gain among more than 100 currencies tracked by Bloomberg after the zloty’s 9.3 percent advance. The currency of Hungary, the most indebted nation in the east of the European Union, weakened 0.2 percent to 292.14 per euro by 4:16 p.m. in Budapest.
Hungary’s currency may appreciate to 285 per euro by the end of this quarter, reach 282 in June and 280 by year-end, said Budapest-based CIB, a unit of Intesa Sanpaolo SpA. CIB was the most accurate forecaster for the euro-forint exchange rate in the six quarters through December, according to data compiled by Bloomberg.
The Magyar Nemzeti Bank, which cut its benchmark rate by a cumulative 1.25 percentage points in five consecutive months last year to 5.75 percent, may slow monetary easing this year, said Sandor Jobbagy, an analyst at CIB. The forint will also be supported by the government’s efforts to keep the deficit within the EU’s prescribed limit of 3 percent of gross domestic product and by Hungary’s surplus in foreign trade and current account, he said.
“There may be a slight appreciation if we look at the whole year,” Jobbagy said by phone today.
CIB’s euro-forint forecasts for the first quarter and the end of 2013 match the median of 19 analysts surveyed by Bloomberg. The median projection for mid-2013 is 285 per euro.
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