BUDAPEST (Reuters) - Hungary’s central bank has no exchange rate target and is not concerned by a recent weakening of the forint, one of its deputy governors said.
“The National Bank of Hungary has nothing to do about this. It has obligations set out in the law and goals, but it has no exchange rate target,” Ferenc Gerhardt said in an interview on Friday posted on Inforadio’s website.
“The NBH ... does not care about the movement of the exchange rate,” he added.
A dollar rally and expectations of higher U.S. interest rates, as well as Italy’s political turmoil, knocked the Czech crown, the forint and the zloty to multi-month lows in May, although they rebounded somewhat last week.
The forint has weakened to around 320 EURHUF=D3 against the euro, a 3 percent slide from mid-April and close to a two-year low. It is down about 2.7 percent so far this year.
Hungarian Finance Minister Mihaly Varga said on Friday he saw no reason to worry about the weakness, which he said was due to market factors and was in a “balanced” range.
Varga added that countries with higher debt were more vulnerable to market swings so Hungary must continue its drive to reduce public debt.
The National Bank of Hungary is one of Central Europe’s most dovish central banks. It has pledged to keep monetary conditions loose for an extended period. Its benchmark base rate is at a record low 0.9 percentNBHI.
The bank’s next rate-setting meeting is due on June 19.
Reporting by Krisztina Than; Editing by Alexander Smith