Does the government intentionally weaken forint?

Opposition lawmakers have blamed the prime minister and the central bank governor for Hungary’s high rate of inflation and “the poor state” of the economy.

Speaking after the release of the central bank’s quarterly Inflation Report on Thursday, László Varjú, DK’s deputy leader, at an online press briefing accused the central bank of “taking no substantial measures” to reduce inflation. According to the bank’s latest report, headline inflation may hit ten percent this year, he said.

The caps put by the government on several product prices have only dented inflation by one percentage point, he said.

Dániel Z. Kárpát, deputy leader of Jobbik, said “the dramatic deterioration of the forint” had been prepared in advance.

“Viktor Orbán and his team have sought to please their international allies and large exporting companies by deliberately weakening the forint, and they have been assisted in their efforts by the National Bank of Hungary,”

he said.

He said the weak forint had been tantamount to the levying of an extra tax on products, which he said totalled around 1,000 billion forints (EUR 2.6bn).

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Fidesz in response said that if the left wing had been in power “there would be war in Hungary and an escalation of war”. “The rate of inflation is high in the whole of Europe because of the war, sanctions and rising energy prices,” the ruling party said in a statement.

It noted that the government decided to cap the price of fuel, basic foods and interest paid on loans, and to maintain household energy price cuts to protect Hungarians. “The left wing withheld its support for all of those measures, and in fact wants to

make Hungarian people to pay the price of the war through their irresponsible demands for sanctions,”

Fidesz said.

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Source: MTI