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Forint Goes Lower as Borrowing Costs Rise

December 29, 2011 at 19:29 by Vladimir Vyun

The old House of Representatives in Pest on a Hungarian 10,000-forint noteThe Hungarian forint declined today, though it currently attempts to regain strength, as the result of the debt auction wasn’t favorable and the rating agencies downgraded the nation’s credit rating.

Hungary sold 15 billion forint ($62 million) of bonds. That’s 18 billion forint below the target. The government rejected all bids for three-year notes. Yield on securities increased to the highest level in more than two years.

Standard & Poor’s cut Hungary’s credit rating below the investment grade last week, while Moody’s Investor Service slashed the nation’s sovereign rating to junk a month ago. The European Union and the International Monetary Fund stopped talks about a bailout for Hungary on concerns that the discussed measures might curb independence of the country’s central bank.

USD/HUF traded at 239.60 as of 19:29 GMT today, following the advance from 239.12 to 242.76.

If you have any questions, comments, or opinions regarding the Hungarian Forint, feel free to post them using the commentary form below.

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