The Hungarian forint opened weak on
Tuesday and soon it set new the new alltime
low - EUR/HUF 277.10. Downward
pressure on forint slightly eased during the
morning session and the forint gained
almost 1%. Nevertheless in the afternoon
the downward pressure revived and the
EUR/HUF pair returned back above the 277
level closing at 277.45.
Interestingly, the Finance Ministry published
yesterday. The new cash-flow budget deficit
forecast raised the deficit projection from 1
546 bn to 1 768 bn HUF. This figure does
not include 238 bn HUF of motorway debt,
which will be included next year but it covers
50 bn HUF of ‘buffer reserve’. This
information come largely as neutral as
markets already took into account that
budget deficit according to ESA95 for this
year would not be less than 8% of GDP and
cash-flow based budget figures did not bring
any surprise.
Today the economic calendar is again blank.
Most probably the forint will stay vulnerable
as sentiment remains poor. Nevertheless we
do not think the forint should not loose much
more without some stronger impetus.
ČSOB Investment Research