Hungary's inflation rate climbed to 7.1 percent in November, from 6.7 percent a month earlier while the central bank's main interest rate is currently at 7.5 percent.
``Before the inflation report some traders bet on a rate cut, but today's data boosted belief the central bank won't reduce borrowing costs,'' said Jaroslaw Janecki, chief economist at Societe Generale in Warsaw. ``There is even some speculation we may see a rate rise and this is supportive for the forint.''
The forint rose to 251.80 per euro by 11:05 a.m. in Budapest today, from 252.00 yesterday. The currency is now 4 percent above its 10-month low of 262.38 per euro reached on Aug. 17.
The central bank left the two-week deposit rate unchanged at the November meeting as policy makers pledged to focus on ``cooling'' inflation expectations to prevent the effects of surging food and fuel prices from spreading across the central European economy.
Here it is a case of this way you lose, and that way you lose too.