BLBG:Forint Jumps Most on Record Against Swiss Franc as SNB Moves on Currency
The Hungarian forint jumped as much as 10 percent againt the Swiss franc, the most on record, after the Swiss central bank said it’s setting a minimum franc exchange rate of 1.20 against the euro.
The forint traded 8.5 percent stronger at 229.5 per franc at 10:26 a.m. in Budapest, compared with 250.7 yesterday, and pared its losses this year to 3 percent. The forint rose 0.8 percent against the euro to 276. The benchmark BUX stock index rose 2 percent, led by a 5.8 percent jump in OTP Bank Nyrt.
The Swiss central bank is “aiming for a substantial and sustained weakening of the franc,” it said in an e-mailed statement today. ‘The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.’’
The weaker forint hurt homeowners who bought property with foreign-currency loans because they pay more in local currency. Sixty-four percent of Hungarian household mortgages and 61 percent of Hungarian local council debt are denominated in foreign currencies, most of them in the franc, according to central bank data. Hungarian Economy Minister Gyorgy Matolcsy planned to meet central bank President Andras Simor to discuss ways to reduce the burden on borrowers who took out loans in Swiss francs, the government said yesterday.
To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net
To contact the editor responsible for this story: Zoltan Simon at zsimon@bloomberg.net
