Forint at 260-280/euro good for Hungary econ-Bajnai

BUDAPEST, May 16 (BestGrowthStock) – Hungary’s economy needs a
stable forint and recent levels of the forint at between 260 to
280 versus the euro could be considered as a kind of
equilibrium exchange rate, the outgoing prime minister said on
Sunday.

Socialist Prime Minister Gordon Bajnai’s government is an
acting cabinet now before handing over power to the incoming
centre-right cabinet later this month.

“I think what’s good is if the forint is at a predictable,
stable exchange rate, at an equilibrium rate — and I think
recently it has been around this level, somewhere between 260
and 280 versus the euro,” Bajnai told M1 television.

“This is good for the economy and is not too expensive for
foreign currency (Read more about trading foreign currency. loan holders either,” Bajnai added.

He said Hungary needs a credible economic policy to retain
the confidence of foreign investors, after one year of crisis
management which kept the budget deficit in check with painful
spending cuts under the scrutiny of the International Monetary
Fund and the European Union.

“For some time competitiveness can be improved by weakening
the exchange rate, but there will be more jobs only if the cost
of employment decreases significantly,” he said.

“Therefore I support… all efforts that aim to reduce
taxes but only if they do not upset the budget balance.”

The forint, which was at all time lows of around 317 versus
the euro in March 2009, traded at 276-277 on Friday.

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(Reporting by Krisztina Than; Editing by Diane Craft)

Forint at 260-280/euro good for Hungary econ-Bajnai