Forint at new lows against the euro, dollar and Swiss franc! – UPDATE

The forint weakened to an all-time low in interbank foreign exchange trading, with the euro at 410 forints, the dollar close to 400 forints and the Swiss franc above 412 forints, says MTI

The Hungarian forint reached new lows against major currencies on Tuesday, with the euro at 409.84 forints, the dollar at 399.39 forints and the Swiss franc at 412.71 forints.

At 4:30 p.m., the euro was quoted at 409.40 forints, the dollar at 399.04 forints and the Swiss franc at 412.02 forints, a 1.8 percent weakening against the euro, a 3.6 percent weakening against the dollar and a 3.7 percent weakening against the Swiss franc compared with 7 a.m.

The forint is 11.0 percent weaker against the euro at midday compared with the start of the year, 23.0 percent weaker against the dollar and 15.8 percent weaker against the Swiss franc.

UPDATE

The Hungarian currency staged a partial recovery to 407.43 per euro by 7pm, compared with 402.10 at 7am.

The forint weakened to a new low of 399.42 against the dollar on Tuesday before firming to 397.77 by the evening.

The forint traded at 410.20 against the Swiss franc at 7pm after reaching a new low of 412.71 during the day.

At 7pm, the forint was down by 10.5 percent against the euro compared with the start of the year, 22.6 percent against the dollar, and by 15.4 percent against the Swiss franc.

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Why the forint is so weak?

Among the reasons is that the government has still not agreed with the European Commission on the resources for the Recovery Fund (RRF) and the new operational programmes. Although government officials have from time to time tried to reassure the market with optimistic statements, this is no longer enough, reassurance from Brussels is needed.

Also not in favour of the forint is the fact that the fundamentals of the Hungarian economy, especially external financial indicators, have deteriorated significantly, the government’s adjustment package has not been very market-friendly with the new extra taxes, and the energy crisis is also looming on the horizon.

Many Hungarians are also exchanging their forints for other currencies for the holiday season.