Forint at an all-time low as the country struggles with crisis

As emerging-market policymakers scramble to contain the economic fallout from the global pandemic, Hungary’s central bank is giving currency traders mixed signals. On the one hand, it has announced significant liquidity easing, while on the other hand, they are curbing cash available via some tools at weekly tenders, reports Bloomberg.

Policymakers have offered to pump up to 9.6 trillion forints ($29 billion) in liquidity into the economy via weekly repo tenders of as much as five years in maturity, part of their efforts to prop up banks and firms. But the volume of cash injected into the economy for a shorter term through foreign-currency swaps has fallen.

“The National Bank of Hungary is unlikely to welcome the current dynamics of forint weakening despite the economic deceleration and will likely target a gradual depreciation path,” analysts including Eszter Gargyan said in a note.