BUDAPEST: Hungary’s forint edged higher and its bonds were steady on Friday, while other central European currencies drifted as data pointed to a sluggish economic recovery ahead.
High inflation has taken a large bite out of economies around the region, and data from Hungary on Friday showed the economy there finally getting out of a recession as the economy increased quarter-on-quarter.
Hungarian bond traders were digesting the country’s 2024 borrowing outlook as officials detailed plans to cover a deficit that the government aims to cut to 2.9% of gross domestic product, sharply down from 5.2% forecast this year.
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Hungarian 10-year benchmark yields were steady.
“It all depends on whether they can keep with the 2.9% deficit target,” a Budapest-based bond trader said.
“What we heard sounds good, looks good from a forint-financing point of view, but it’s too early to tell how feasible it actually is.”
The forint was up 0.2% to 380.22 against the euro at 1000 GMT, erasing early falls following a two-day losing streak.
It had hit a four-month high of 375.55 in mid-November, backed by a high-rate differential with the euro zone - as Hungary’s base rate of 11.50% is the highest in the region - and a relatively clear rate-cutting path.
Poland’s zloty edged up slightly to 4.35 to the euro, while the Czech crown was down 0.1% at 24.34.
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