Expert: The forint will inevitably weaken soon, 400 EUR/HUF level expected again
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István Al-Hilal, the CEE regional leader of Fidelity International, talked about the future of the Hungarian national currency in an online professional event organised by OTP Private Banking. He suggested the Hungarian forint will remain “strong” until the central bank keeps the base interest rate high. However, the bank cannot hold that this high forever. Therefore, a weakening is inevitable soon.
As we wrote before, the Hungarian forint is among the most popular currencies among foreign investors. That is because its exchange rate against the euro and the USD decreased significantly in the last few months. The end of 2022 was a period of historic lows against the main foreign currencies. For example, the euro broke even the psychological barrier of 430.
However, the central bank intervened and raised the base interest rate considerably. Furthermore, some good news started to come about, releasing at least some of the frozen EU development and RRF money. Even though there is no significant approach in the latter issue, the investors seem to have priced the Hungarian economy policy and the forint. Therefore, the exchange rate started to get better this January, and now it stands around 370/EUR.
We wrote HERE about the consequences of the Turkish elections on the national currencies of the different emerging countries, including the forint. Last Sunday’s elections did not decide Erdogan’s fate. There will be a second round on 28 May. But it seems that kind of uncertainty did not shake the forint. Experts thought it would because the forint is vulnerable to a global crisis. And a change in Türkiye (or the continuation of Erdogan’s unorthodox economic policies) would certainly trigger one.
The BIG Picture – look at ALL the componentry of the Hungarian Economy, the MAJOR financial & economic indicators they ALL – through an on-gong PULVERISATION – sooner than later will be at substantially lower levels.
Hungary is in a WORSENING Recession.
Hungary – is on the “Cusp” – when doing the FIGURES – of trending to-wards a situation that it could be argued reflect being INSOLVENT.
WHAT – what is GOING to slow down the COLLAPSING Hungarian Economy???
WHAT – what are Factors that could bring about STABLIZING the “crushing” or collapsing Hungarian Economy??
The word SUSTAINABILITY – of the Hungarian Economy – finding a level creating a base to move in an up-wards directional TREND – impossible at this point in time, that it’s all a NADIR picture/trend – not knowing what the end result, the cataclysmic MESS – its END result will be.
The Central Bank of Hungary – can’t hold the base interest rate at this present HIGH levels.
June 2023 – will be a CRUCH time period in Hungary, that the HAND of the Central Bank – will be FORCED to let the FORINT again slide into, the depths of the un-known.
The Central Bank – is “reeling” in DAMAGE control mode – at this point in time, through massive ERRORS it has made relating to the Hungarian Economy.
Wonder how our Gold Reserves are holding up ///