Forint Advances Before Hungary’s Rate Decision: Budapest Mover
The forint gained the most in more than a week and Hungary’s bond yields fell as the country’s central bankers met to decide whether to extend 10 consecutive months of rate cuts today.
The forint appreciated 1 percent to 296.19 per euro by 10:03 a.m. in Budapest. Yields on the government’s benchmark 10-year bonds dropped 23 basis points, or 0.23 percentage point, to 6.64 percent, after reaching the highest since December yesterday.
The Magyar Nemzeti Bank will probably cut its benchmark rate by 25 basis points to a record 4.25 percent, according to all 25 analysts polled by Bloomberg. Traders cut wagers on further monetary easing as plans by the Federal Reserve to taper stimulus caused emerging-market assets to tumble.
“The unsettled global environment and the bulk of rate cuts already behind us may make the Monetary Council reconsider what has been a practice of automatic cuts until now,” Zsolt Kondrat, a Budapest-based analyst at MKB Bank Zrt., a unit of Bayerische Landesbank, wrote in a research report today. “A pause in easing would be a positive surprise which may make the exchange rate strengthen by a few forints.”
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