The forint gained for a fourth day as data showed Hungary’s manufacturing expanded at the fastest pace in six months and on speculation the Federal Reserve will maintain stimulus as a U.S. government shutdown slows growth.
Hungarian Prime Minister Viktor Orban will probably expand the central bank’s rate-setting Monetary Council as the board prepares to channel cheap loans into the recession-hit economy after a new Magyar Nemzeti Bank president is selected, Citigroup Inc. said.
The European Union is worried about the rule of law in Hungary and the economy there is stuck in recession. Prime Minister Viktor Orban is doing his best to turn that to his advantage in next year’s election.
Hungary will probably increase the European Union’s highest benchmark interest rate after the trading bloc and the International Monetary Fund suspended talks about a bailout, threatening to pressure local assets.
Hungarian inflation was faster than economists forecast in November as the forint’s plunge boosted fuel costs, increasing pressure on policy makers to raise the European Union’s highest main interest rate.