When we last focused on the Hungarian Forint back in January, the Hungarian authorities had announced at that time that they were willing to make concessions with the IMF and EU on a disputed central bank law as well as on some taxation related issues. Here we are 6 months later and the details are still being worked out. In fact, the IMF, the ECB and the EU won't even begin talks in earnest on the requested IMF aid until the changes have been implemented.
Over the previous 6 month time frame there has been some fairly significant volatility in the US Dollar / Forint cross, including a 5% move stronger so far in the month of June. Here's the line chart of the USDHUF cross going back to the beginning of 2012:
Here are some more details on recent developments provided by Bloomberg Businessweek:
The victory of pro-bailout parties in Greece reduces the chances of contagion in Europe and helps Hungary’s outlook for continued debt financing from the markets, Mihaly Varga, Hungary’s chief negotiator for an International Monetary Fund- led aid deal, told MR1 state radio today. The government has completed details of an amendment to a disputed central bank law, which may be acceptable to the Magyar Nemzeti Bank, and probably will be submitted to Parliament this week, Varga said.
“A serious obstacle to the bailout talks may actually be removed,” Levente Blaho and Adam Keszeg, analysts at Raiffeisen Bank International AG (RBI), wrote in a research report today. “The forint started the week on a month high, which was mainly to do with the Greek election news and also helped by the comments” from Varga, the Raiffeisen analysts added.
There remains a very tight inverse correlation between the USDHUF cross and the benchmark equity index, the Hungarian Traded Index:
No comments:
Post a Comment