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Hungary forint plunges to 30-month-low against euro

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(Globalpost/GlobalPost)

Hungary's national currency sank to a 30-month-low on Tuesday, a drop analysts said was due to traders selling up after central bank moves to tighten the secondary bond market.

The forint slumped to 315.50 against the euro, its weakest point for 2.5 years after breaking what some traders called a psychological barrier of 315.0.

Analysts said traders were trying to leave the secondary bond market after Hungary's Central Bank (MNB) imposed a bar on buying two-week bonds this month in a bid to prompt traders to buy longer-term government debt.

Several of EU member Hungary's neighbours have seen their currencies lose value in recent weeks as investors have fled so-called riskier investments because of concerns over the Ukrainian-Russian conflict and the Middle East.

But business website portfolio.hu said the forint's performance has been particularly poor, the second worst-performing of nearly 30 emerging market currencies against the euro over the past three months.

In that time the Hungarian currency has lost 2.1 percent against the European single currency, behind only Ukraine's hryvnia, which has dropped 4.7 percent amid the violence in the east of the country, portfolio.hu said.

Last month the forint dropped sharply after the government announced a radical plan to ease household debt as well as a warning from Brussels over rising public debt.

pmu/cah

http://www.globalpost.com/dispatch/news/afp/140805/hungary-forint-plunges-30-month-low-against-euro