Who weakens the Hungarian Forint?

Roubini Global Economics insists that it was not its research note that sparked a sell-off of the Hungarian currency but comments last week by Hungarian economics minister György Matolcsy that the policy of a strong forint between 2002 and 2010 had been a mistake.

The economy ministry on Monday dismissed criticism that recent remarks by minister Matolcsy were behind the forint's recent weakening against the euro, insisting that speculative attacks were in the background.

Traders attributed the weakening in part to comments on Thursday by Matolcsy that the policy of a strong forint between 2002 and 2010 had been a mistake. According to rumors in the press, Matolcsy could be appointed to head the central bank from March when the term of current governor, András Simor, expires.

Roubini reiterated that the HUF’s rapid slide was triggered by the minister’s remark on monetary policy. The Ministry said on Monday investors were speculating against the forint on the advice of American economist Nouriel Roubini, whose research company on 3 January recommended selling the forint.

The Ministry’s statement came days after the forint plunged to a seven-month low on the back of remarks by Matolcsy, which were interpreted as favoring a weaker currency to help boost growth.