Somewhat stronger forint today on GDP data and comments by the finance minister

HUNGARY - In Brief 14 Feb 2020 by Istvan Racz
The forint moved upwards today, to EURHUF 335-336 in early afternoon trade. We see two factors potentially behind this.First, GDP growth was reported at 4.5% yoy for Q4 and 4.9% for the full year. Some presented this as a positive surprise, as e.g. Portfolio.hu had a 4.2% yoy average analyst expectation for the Q4 figure. We do not quite agree, as our own forecast was 4.6% yoy, against which the preliminary actual looks more like in line, but the market reality may be somewhat different, of course.The other story was finance minister Varga speaking on television this morning. Yesterday, cabinet minister Gulyás was asked about the government's view on forint weakness, and he said that it is no big deal, as FX-denominated mortgages has been long converted into forints, the FX share out of government debt has been reduced to around 20%, and the exchange rate issue is the MNB's responsibility anyway. Mr. Varga spoke in bit different way, saying that despite the low share of FX out of government debt, the weak forint can still hurt. He added that forint weakening is not so much the problem; the real trouble can be if the exchange rate is not stable and predictable. By this, he essentially repeated his remarks made last September, when the forint hit a low of 332 against the euro. At that time, MNB governor Matolcsy reacted to Mr. Varga's comments in an angry article within a few days.The market may be reading the finance minister's - otherwise quite cautious - comments as a tacit warning against an uncontrolled and unlimited weak trend of the currency.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.