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Forint Rises as Foreign Funds Flock to Investment-Grade Hungary

  • Currency rallies to its highest level since May 2015
  • Foreigh investors increase forint-bond holdings since S&P move

Hungary’s forint jumped to its strongest in more than a year as a surprise return of the country’s debt to investment-grade status at S&P Global Ratings last week fueled demand.

The currency gained 0.7 percent to 306.10 against the euro, the highest since May 2015, amid a broad emerging-market rally supported by the Federal Reserve holding off interest-rate hikes. Hungary’s local-currency bonds extended the strongest performance this month among east European peers, also helped by the central bank’s cap on how much cash lenders can keep in its main deposit instrument which has channeled more money into the country’s debt.