Romania needs its Dec. 9 election to end a political war that has split the nation’s leaders or face a slide in the currency, bonds and investments, said executives and analysts from Bucharest to London.
The forint retreated from the strongest in seven weeks and Hungarian bonds slumped after Prime Minister Viktor Orban’s government said it will increase taxes on financial services to curb the nation’s budget deficit.
Hungary will probably leave its benchmark interest rate unchanged today for a fifth month as the government’s commitment to fiscal rigor helped curbed risk costs, reducing the likelihood of a rate hike.
Hungary must cut spending because a plan to impose temporary taxes and retain pension-fund savings will fail to control the fiscal deficit from 2013 and risk long- term funding, Morgan Stanley and UniCredit SpA said.
The Turkish lira, which trailed emerging market currencies from the Brazilian real to the Russian ruble last year, is attracting bullish recommendations after first-quarter economic growth approached that of China.