KBC Market Research Desk
KBC Bank
Although it seems that the Russian rouble has entered into a consolidation zone, the Polish zloty and the Hungarian forint still feel some negative spill over effect. But the weakness of these currencies is not just about external contagion, but due to domestic factors too. Especially the latest underperformance of the zloty is related the recent release of the Minute form the latest NBP meeting. They showed that surprisingly a lot of MPC members were in favour of a rate (including NBP’s governor Marek Belka).
As concerns the forint recall that yesterday there was a press conference of Hungary’s Prime Minister Viktor Orban and NBH’s chair György Matolcsy announced a “strategic cooperation” with unprofitable MKB Bank by offering a safety net, by which the central bank will guarantee liquidity for MKB to all of its financial obligations. Hungary acquired MKB in July in accordance with the government’s agenda to boost domestic ownership in the country’s banking industry to above 50 percent. Later on NBH’ rhetoric reinforced the recent stance about no need for FX intervention on HUF market, because the central bank has only inflation but no FX rate target.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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