Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers.The Hungarian forint fell to a record low against the euro on Monday, exposing the economy’s vulnerabilities and putting pressure on Prime Minister Viktor Orban to reach a deal with Brussels on the release of frozen European Union funds.n advertisement poster promoting China’s renminbi (RMB) or yuan , U.S. dollar and Euro exchange services is seen outside at foreign exchange store in Hong Kong, China August 13, 2015. REUTERS/Tyrone Siu/File Photo
Register now for FREE unlimited access to Reuters.comBEIJING, Dec 3 (Reuters) – China’s foreign exchange regulator issued guidelines on foreign exchange trading on Friday, targeting market manipulation, fraud and abuses.The guidelines would help regulate foreign exchange market trading and promote “honest, fair, orderly and efficient” market operations, the State Administration of Foreign Exchange said.
Market participants would be barred from manipulating closing currency prices or other benchmark prices and barred from abusing dominant market positions to influence prices, according to the guidelines.Advertisement · Scroll to continueMarket participants would be barred from using non-public, market-moving information to engage in currency trading, or use such information to advise others to conduct trading, the guidelines said.Market participants should appropriately conduct proprietary currency trading, actively provide market liquidity and adjust supply and demand in the market, and help keep the yuan basically stable at a reasonable and balanced level.Advertisement · Scroll to continueSources have told Reuters a central bank-led self-regulatory group that helps oversee China’s foreign exchange industry had asked commercial banks to cap the size of their proprietary trading accounts, which many market participants interpreted as a move to limit financial institutions’ speculation on the yuan Hungarian forint fell to a record low against the euro on Monday, exposing the economy’s vulnerabilities and putting pressure on Prime Minister Viktor Orban to reach a deal with Brussels on the release of frozen European Union funds.
Unblocking access to about 15.5 billion euros of EU recovery fund grants and loans, pending approval by the EU’s executive Commission, could boost the forint and trigger a winding down of short positions built up against the currency, while also driving down government bond yields, analysts said
In the absence of a deal, the forint will stay on a weakening trajectory, complicating efforts to curb double-digit inflation and exposing Hungarian assets to any negative shift in sentiment amid the war in neighbouring Ukraine and surging energy costs.The EU funds are also needed to bolster the Hungarian economy which is expected to slow in the second half of the year as rapidly rising interest rates and inflation bite.
Like most EU countries, Hungary last year submitted its blueprint on how it would use EU grants to make its economy more environmentally friendly and high-tech after the COVID-19 pandemic.But unlike the blueprints of most other countries, Hungary has yet to receive approval because of EU concerns over corruption, judicial independence and the rule of law.