Forint slump to trigger renewed talk of IMF deal

The latest slump in the Hungarian forint has taken the currency to below 300/€ – the rate that, on past form at least, has triggered a response from the authorities. This time around, the response will probably come in the form of a renewed government commitment to agreeing a deal with the IMF/EU. But in practice, talks on a programme will not start for at least another month, and there remain several significant barriers to a successful conclusion. In short, we see further downside risks to the forint.