The Hungarian forint firmed on Monday’s session from opening values at 282.00 EUR/HUF to 280.10 EUR/HUF

The Hungarian forint firmed on Monday’s session from opening values at 282.00 EUR/HUF to 280.10 EUR/HUF. The main positive impetus was that Hungary’s president László Sólyom signed the law of tax increase on Monday thus there will be no delay in implementation of fiscal package which aims to consolidate problematic Hungary’s public finance approved by parliament last week. Sólyom’s approval means that large part of the package, such as corporate tax hike from 16% to 20% as well as middle rate VAT increase from 15% to 20% will be implemented already in September.

Today, there won’t be published any key macroeconomic data (gross wages are not a market moving factor) thus the forint will remain under negative influence of escalation of the conflict in Middle East. Concurrently Prime Minister Gyurcsány together with Finance Minister Veres and Governor Járai will hold press conference concerning negotiations on the Convergence Program, which should be submitted to European Commission on September 1. But since we do not expect many details to be made public we believe this press conference will come largely as market neutral. Forint rebounds on a tax bill.

(CSOB - Investment research)