27 October 2003 23:30
Forint softer on interbank market in wake of rouble, zloty weakness
Budapest, October 27, 2003 (MTI-ECONEWS) - The forint stood at 8.72pc on the strong side of its trading band on the
interbank forex market on Monday afternoon, 72 basis points weaker than its position of 9.44pc on Wednesday, the most
recent trading day. The euro traded at HUF 257.70/80 compared to HUF 255.60/70 at Wednesday's close. Dealers said
there was significant trading on the forex market, with the forint moving between 8.52-8.89pc. During a four-day weekend
in Hungary, the zloty and the Russian rouble weakened significantly on international markets, which had a negative
influence on the forint market on Monday. The euro moved between HUF 257.25-258.30. The dollar traded around HUF 219
throughout the session, HUF 1 stronger than the HUF 217.70/90 registered on Wednesday afternoon. O/N and T/N interest
rates rose significantly due to the liquidity squeeze. O/N deals were struck at as high as 10.60pc, with T/N dollar swap
deals struck at 11.50pc, while both short-term interest rates stood at 10.50pc on Wednesday. Dealers said the liquidity
squeeze could lessen slightly on Wednesday when two-week central bank deposits worth HUF 178bn are due to expire. The
banks are expected to use this money to meet their October reserve obligations, due at the end of the week. Dealers
reported relatively active selling turnover from the secondary market of government securities, with yields accordingly
rising 5-10 basis points for all maturities.
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