The forint strengthened to Ft 281.1 per euro from Ft 286 on Tuesday and briefly went under Ft 280 during the day yesterday.
Three factors contributed to the rally, said Commerzbank trader Mihály Ötvös. First, the risk to the region posed by the Latvian lat seems to be fading, as the Latvian government is planning a large budget cut, and is close to a financing agreement with the IMF.
Second, the dollar weakened against the euro; and thirdly, the market interpreted remarks by National Bank deputy governor Ferenc Karvalits as meaning that the base rate will not be reduced this month, Ötvös said.