After Monday’s holiday in London investors
digested the 50 bps hike of NBH on
Tuesday. As a result, the forint in the
morning firmed to 274.8 EUR/HUF but the
Hungarian currency gave up some of its
gains soon and for the rest of the session it
hovered around 275.5 against the euro.
Regarding the budget, the State Audit
Office, which in the past often criticized
Hungary’s budget overshooting, now
supports the revised version of Convergence
Programme.
Also former central bank head
and member of Euro Convergence Council
Gyorgy Suranyi gave a favourable opinion of
the programme, as on Tuesday he said that
the macroeconomic aspects of adjustment
are realistic or even pessimistic. According
to this view, the programme involves rather
reserves than risks. Local media also
speculated that the European Commission
will accept the revised program without
demur. Nevertheless the European
Commission’s official statement should not
be available till late September or early
October.
We don’t believe that today’s higher than
expected PPI figures to significantly
influence the forint. Investors will most
probably opt for a wait-and-see strategy
before ECB meeting on Thursday and we
expect the forint to trade stable around
275.5 EUR/HUF.
(CSOB - Investment research)