Bad news coming from Romania - that the IMF arrangement was derailed again and the increased political risk - has affected the entire region, with foreign players betting massively on the depreciation of the Hungarian forint in the context where speculations against the RON are limited by the very low liquidity of the Bucharest market, comments Lars Christensen, chief analyst at Danske Bank.
"The sharp rise in risk aversion on the back of news out of Romania had an effect on Central and Eastern European markets with the most vulnerable currency, the Hungarian forint, selling off the most. This was natural, given that the forint is probably the best proxy trade for the RON because the RON is very illiquid," Lars Christensen says.
The Hungarian forint lost 1.7% against mid last week, with the Polish zloty recording a similar depreciation. Despite low volumes, which keep investors away from the Bucharest market, the RON lost a more significant 2.7%. The European Central Bank, which gathers data from the forex market independently, though later than the NBR (National Bank of Romania), yesterday calculated a 4.3405 RON/euro exchange rate, 5.45 bani (1RON - 100 bani) or 1.2% more than last Friday. The NBR calculated a 4.3257 RON/euro exchange rate, a new all-time high.
Bad news coming from Romania - that the IMF arrangement was derailed again and the increased political risk - has affected the entire region, with foreign players betting massively on the depreciation of the Hungarian forint in the context where speculations against the RON are limited by the very low liquidity of the Bucharest market, comments Lars Christensen, chief analyst at Danske Bank.
"The sharp rise in risk aversion on the back of news out of Romania had an effect on Central and Eastern European markets with the most vulnerable currency, the Hungarian forint, selling off the