Forint Drops to Five-Week Low as Hungary Stalls in EU Aid Talks
The forint weakened for a third day against the euro, reaching the lowest in five weeks, on concern an escalation of Hungary’s disputes with the European Commission will delay a bailout for the country.
The Hungarian currency depreciated 0.7 percent to 294.5 per euro by 4:14 p.m. in Budapest, the weakest on a closing basis since Jan. 31.
Disputes with the European Union over the independence of the central bank, the judiciary and the data protection authority have prevented Hungary from starting talks on a bailout from the bloc and the International Monetary Fund that the government requested in November. Hungary will take a “determined” stand against the Commission and some matters will end up in court, Janos Lazar, head of the ruling Fidesz party’s parliamentary group, told M1 television today.
“The market may now be slowly pricing out the possibility of a quick deal with the international organizations,” Levente Blaho and Adam Keszeg, analysts at Raiffeisen Bank International AG (RBI) in Budapest, wrote in a research report today on the forint.
European stocks fell today as a report confirmed a contraction in the euro-area economy, Hungary’s main trading partner.
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