The Hungarian forint had again a calm
session. The forint slightly firmed to a 9-
month high but did not manage to break
through the technical barrier at EUR/HUF
255.0.
From a domestic point of view, it is worth
mentioning the parliament’s approval of key
figures of the 2007 budget. However there
were no major changes compared to the
convergence programme and the overall
deficit target remains for the next year at 6.8
% of GDP. This information came in largely
as market neutral. Also the Constitutional
Court is continuing ruling on appeals against
various parts of government fiscal austerity
package. On Tuesday, the Court rejected an
appeal against the increase of the middle
value added tax rate to 20% from 15%, which is expected, according to the
government, to bring extra revenues worth
HUF 60 bln this year and HUF 170 bln next
year. Also the publication of the EU
convergence report had no impact on HUFtrading
yesterday.
Today, the session is devoid of economic
releases. Although we believe that the
regional sentiment will still be positive, as
investors’ risk appetite remains strong, which
was illustrated by yesterday’s US stocks
rise. At the same time we expect that before
tomorrow’s ECB meeting the forint will move
rather sideways above the technical barrier
EUR/HUF 255.0.
ČSOB Investment Research