Forint Tumbles in Thin Trading, Defying Matolcsy’s Hawkish Tone
(Bloomberg) -- The Hungarian currency fell to a record low against the euro in light post-holiday volumes on Monday, with traders looking past hawkish comments from central bank Governor Gyorgy Matolcsy.
The forint was down 0.6% on the day, trading at 371.37 against the euro at 11:20 a.m. in Budapest. It briefly tumbled to an all-time low of 384.37 earlier on Monday amid low liquidity as U.K. markets are closed one day after Boxing Day.
“The market isn’t there,” said Istvan Gondi, a Budapest-based foreign exchange trader at Raiffeisen Bank International AG’s Hungarian unit. “There were bids but offers have basically disappeared.”
The Hungarian currency lost 2.3% against the euro this year, lagging peers from the European Union’s east, as the country’s central bank sought to tame an inflation spike and offset pre-election budget spending with aggressive monetary tightening measures.
Matolcsy said earlier on Monday the central bank would raise the benchmark interest rate in the first half of 2022 to align it with the one-week deposit rate. He also urged more fiscal austerity on top of recently announced measures to help boost the forint.
©2021 Bloomberg L.P.