Hungarian Parliament delays vote on central bank bill

As requested over the weekend by Hungary’s chief aid negotiator Mihály Varga, who saw the pressure on the Hungarian market, Hungarian Parliament put off the vote on the planned amendments to the central bank law on Monday.

Members of Parliament did as they were asked. As a result, investors’ mood started to lighten up on the afternoon and the Hungarian czurrency started to firm, as well, since the changes proposed by the government would have not taken into consideration the ECB’s remaining concerns over central bank independence, and thus, would not be satisfactory for the EU and the IMF.

The European Commission said in the afternoon that the ball is in Hungary’s court now. Head of the parliamentary group of the ruling Fidesz party said the changes to the Central Bank Act will be approved before the end of the summer recess, i.e. by about the middle of July.

As the financial website portfolio.hu remarks, this delays Hungary’s pending talks with the IMF/EU on a financial assistance program even further. Without an IMF-provided safety net the forint remains at the mercy of global winds and any aggravation in the Euro zone’s debt drama will find it vulnerable.