Thursday, January 17, 2013

Dr. Doom Blamed for Currency Crunch

Hungary's economy ministry blamed American economist Nouriel Roubini's research firm for sparking a slide in the country's currency, despite recent comments by the ministry's top official hinting that a weakening wouldn't be unwelcome, according to a WSJ report.

The Hungarian forint dropped sharply against the euro and dollar toward the end of last week. Monday, it hovered near 300 forints versus the euro, the lowest value in about seven months. The weakness is an issue for households, businesses and the government here, which have borrowed heavily in foreign currencies.

"Nouriel Roubini, one of the most influential financial analysts in the world, recommended taking a forint short position in an investment note," which was published Jan. 3, the ministry said in a statement Monday. "It seems that speculators have taken Mr. Roubini's advice and started their attack on the forint...."

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