Economy
Hungary markets watchdog to also launch probe into misleading agency headline
István Binder, spokesman for the watchdog, told local newswire MTI today that the decision to launch an investigation into the matter had been made already on Tuesday, adding that the findings will be made public once the probe is concluded.
Before the announcement of the central bank’s rate decision due at 14:00 CET, Bloomberg published a headline saying the NBH cut its base rate to 1% (by 400 basis points), although the headline was almost immediately retracted. The Monetary Council in fact lowered the bank’s key policy rate by 25 bp to a record low of 4.75%, as expected. For a few seconds the forint spiked to almost 303 from around 300 but then it corrected back.
The NBH said in a statement that it is “deeply concerned that a news agency published strongly misleading information" concerning the interest rate decision before the official publication time.
Urging the news agency to take “decisive measures in order to avoid similar misinformation in the future", it also noted that the financial market volatility that temporarily emerged after the misleading information had been published is “subject to further inquiry."
According to the relevant section of the Capital Market Act, the following qualifies as market manipulation: "disclosure or publication of unfounded, misleading or false information, provided the persons disseminating are aware of the false or misleading nature of the information or they should have been aware if they acted displaying ordinary care in the given situation."
Market manipulation also means a transaction or an order for a transaction which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of financial instruments; which secure the price of the given financial instrument at an abnormal or artificial level; which are sham or which employ fictitious devides or any other form of deception or contrivance.
Before the announcement of the central bank’s rate decision due at 14:00 CET, Bloomberg published a headline saying the NBH cut its base rate to 1% (by 400 basis points), although the headline was almost immediately retracted. The Monetary Council in fact lowered the bank’s key policy rate by 25 bp to a record low of 4.75%, as expected. For a few seconds the forint spiked to almost 303 from around 300 but then it corrected back.
The NBH said in a statement that it is “deeply concerned that a news agency published strongly misleading information" concerning the interest rate decision before the official publication time.
Urging the news agency to take “decisive measures in order to avoid similar misinformation in the future", it also noted that the financial market volatility that temporarily emerged after the misleading information had been published is “subject to further inquiry."
According to the relevant section of the Capital Market Act, the following qualifies as market manipulation: "disclosure or publication of unfounded, misleading or false information, provided the persons disseminating are aware of the false or misleading nature of the information or they should have been aware if they acted displaying ordinary care in the given situation."
Market manipulation also means a transaction or an order for a transaction which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of financial instruments; which secure the price of the given financial instrument at an abnormal or artificial level; which are sham or which employ fictitious devides or any other form of deception or contrivance.
