Hungarian forint weakens, BUX falls after riots

Trade on the forint market was double its daily average, said traders. The forint weakened from Ft 272 per euro to Ft 275 per euro, but returned to Ft 273.1 by the afternoon. Trade on the forint market was double its daily average, said traders. The forint weakened from Ft 272 per euro to Ft 275 per euro, but returned to Ft 273.1 by the afternoon.

US investors saw police intervention during Monday night's protest as "somewhat passive," Finance Minister János Veres said from Singapore, where he is attending the IMF and World Bank conference. "Market uncertainty can only be dispersed if the threat of crimes like the ones on Monday night disappears," Veres added.

Anti-government demonstrations may limit the government in making reforms and hinder financial consolidation, which could in theory lead to a further downgrading of Hungary's debt said credit rating agency Standard & Poor's.

"The value of Hungarian instruments is predominantly linked to the credibility of its reform programmes, which is linked to Gyurcsány," said London-based analyst at investment bank HSBC, Juliet Sampson. "Any development leading to Gyurcsány leaving office would shake the Hungarian market. It is questionable whether anyone else in Hungary exists who compares to Gyurcsány in terms of his oratory abilities and commitment to reforms," Sampson said.

Changing the leader of Hungary would be "a rather risky move" wrote investment bank Dresdner Kleinwort. CIB bank analyst Mariann Trippon said "panic sales would only occur if Gyurcsány's resignation was a realistic possibility, but it is far from reality."

The above story is just one of more than two dozen published today by Hungary Around the Clock, the most comprehensive source of daily English-language news about Hungary. For a free trial of HATC, click here. Hungarian news sources include Népszabadság; Magyar Hírlap; Világgazdaság; Napi Gazdaság; Magyar Nemzet; Népszava; Kossuth Rádió news and Hungarian television's nightly news broadcast.

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