IDEAS home Printed from
   My bibliography  Save this paper

Coping with the speculative attack against the forint's band


  • Gyula Barabás (ed.)

    () (Magyar Nemzeti Bank)

  • Csaba Balogh

    () (Magyar Nemzeti Bank)

  • Tamás Czeti

    () (Magyar Nemzeti Bank)

  • Szilárd Erhart

    (Magyar Nemzeti Bank)

  • Zsolt Érsek

    () (Magyar Nemzeti Bank)

  • András Kármán

    () (Magyar Nemzeti Bank)

  • Gergely Kóczán

    (Magyar Nemzeti Bank)

  • Róbert Rékási

    () (Magyar Nemzeti Bank)


On 15 and 16 January 2003, an intensive speculative attack was launched against the exchange rate band of the forint. This study analyses the monetary policy decisions with regard to the antecedents of the speculation, the events of the speculative episode and the subsequent period of consolidation. The study finds that the speculative attack was irrational and unjustified in view of several considerations. Through adjustments in the policy rate and the modification of monetary instruments, the MNB was able to defend the exchange rate band of the forint. The MNB successfully localized the effects of the speculative attack on the interbank market. The MNB’s presence on the foreign exchange market facilitated the rapid and controlled withdrawal of the speculative capital, without threatening the disinflation process and the stability of the financial system. The investors taking part in the speculation incurred substantial losses, while the market developments after the speculative episode increased the banking system’s profit.

Suggested Citation

  • Gyula Barabás (ed.) & Csaba Balogh & Tamás Czeti & Szilárd Erhart & Zsolt Érsek & András Kármán & Gergely Kóczán & Róbert Rékási, 2003. "Coping with the speculative attack against the forint's band," MNB Background Studies (discontinued) 2003/3, Magyar Nemzeti Bank (Central Bank of Hungary).
  • Handle: RePEc:mnb:backgr:2003/3

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Filacek, Jan & Horvath, Roman & Skorepa, Michal, 2006. "Monetary Policy before Euro Adoption: Challenges for EU New Members," MPRA Paper 879, University Library of Munich, Germany.
    2. Ghosh, Atish R. & Ostry, Jonathan D. & Chamon, Marcos, 2016. "Two targets, two instruments: Monetary and exchange rate policies in emerging market economies," Journal of International Money and Finance, Elsevier, vol. 60(C), pages 172-196.
    3. Péter Gábriel & Klára Pintér, 2006. "The effect of the MNB’s communication on financial markets," MNB Working Papers 2006/9, Magyar Nemzeti Bank (Central Bank of Hungary).

    More about this item


    financial markets; speculative attack; exchange rate; speculative episode.;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnb:backgr:2003/3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.