360 HUF/EUR? Experts revealed when and how it is possible
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The Hungarian forint is a very volatile national currency. Its value currently depends on the energy prices and the much-needed agreement between the European Commission and the Hungarian government. Billions of euros are at stake. The incredible sum is locked in the RRF and development funds due to corruption concerns. But there are deadlines until which the EC must decide whether they unlock those funds and accept the government’s anti-corruption measures.
Mfor.hu, a Hungarian economic news outlet, closely follows the relevant negotiations and regularly draws up future options. Today, Károly Csabai, the editor-in-chief of the news website, and Balázs Wéber, a foreign relations journalist, discussed the latest development in the issue of the EU funds, the forint and the sustainability of Hungary’s budget.
Politico wrote yesterday that the main question is decided: Hungary will receive money from the EU to stabilise its economy. The journalists of the news outlet argued “Orbán has taken the EU hostage, essentially demanding billions in exchange for lifting vetoes on everything from Ukraine aid (EUR 18 billion – DNH editor) to a global corporate tax deal.” Furthermore, he would also like to say ‘Nay’ to the global minimum tax. Since the EU decision-making process requires unanimity in such questions, Orbán’s power reaches far beyond the size of the population or territory of Hungary. Besides, he has a 2/3rd majority in the Hungarian parliament.
Of course, Index writes that the EC and the European Parliament will have a loud debate on the issue. The liberal Renew Europe group already cleared that they will hold EC chairwoman Ursula von der Leyen responsible for letting Hungary sink into the swamp of corruption.
Please correct me if I am wrong, but:
Why would 360 HuF for a Euro be more advantageous that 400?
If you receive Euro’s but spend them as HuF, you will loose 10% on the exchange-rate.
Also, tourists will have 10% less to spend at that rate.
Add to that the skyrocketing inflation and I really fail to see why 360HuF/Euro would be a good thing.
In general, a weaker currency makes imports more expensive, while stimulating exports by making them cheaper for overseas customers to buy. A weak or strong currency can contribute to a nation’s trade deficit or trade surplus over time. Don’t look at it from micro-angle.