Serbia’s dinar, the third-best performer among major eastern Europe currencies this month, may weaken as much as 5 percent as a deepening debt crisis may force banks to “raise capital ratios,” Nordea Bank AB said.
Hungary’s central bank kept interest rates unchanged for a ninth month, saying the European debt crisis raised the country’s borrowing and risk costs and pressured the forint, justifying “a wait-and see” approach.
Emerging-market currencies rallied and the lira jumped from a record low after policy makers in Turkey and Russia stepped up sales of foreign-currency reserves to counter a selloff in developing-nation assets.
The sell-off in emerging-market currencies is reminiscent of declines in the seven- to eight- month period around Lehman Brothers Holdings Inc.’s collapse in 2008 and probably has further to run, Nordea Bank AB said.
Serbia’s central bank cut its benchmark interest rate for the fourth time since June after an easing of inflationary pressures created room for lower borrowing costs amid an economic slowdown and high unemployment.
The forint weakened for a fifth day against the euro to its lowest since April 2009 and Hungary’s credit risk rose on concern the European credit crisis will worsen, hampering government efforts to reduce its debt.