Forint hits new low: Weakest since 2022 amid economic struggles
The Hungarian forint has plunged to its weakest rate against the euro since December 2022, sparking concern among economists. Experts attribute this downturn largely to international factors, including a volatile geopolitical environment, but domestic policies also play a part. The future of the forint may depend heavily on the release of EU funds, though there remains uncertainty about their arrival.
Sharp decline in the forint
The week started poorly for the forint, with the currency hitting a four-month low against the dollar and sliding to HUF 404 per euro by the weekend—the weakest level in nearly two years. Csaba Szajlai, an analyst at Világgazdaság, pointed out in an interview with ATV News that the upcoming U.S. presidential election could influence the euro-forint exchange rate, with a possible Donald Trump victory expected to weaken the euro, while a win by another candidate might stabilise it.
Photo: depositphotos.com
Tensions between Brussels and Hungary’s budget
Economist Csaba Lentner sees Hungary’s ongoing financial struggles with the EU as a primary factor in the forint’s decline, along with the Hungarian National Bank’s current losses totalling around HUF 3,000 billion (EUR 7.40 billion). Lentner believes that Hungary’s absence of EU funding is adding pressure to the currency, stating that the weak Hungarian currency could test the resilience of the economy, especially as the 2026 elections approach. Given the current economic climate, he suggests that the forint could fall as low as HUF 430 per euro.
Trust issues at play
Opposition MP Zoltán Vajda of the MSZP party argues that the Hungarian currency’s persistent decline has deep roots, noting that since 2010, the currency has lost nearly 50% of its value against the euro. According to Vajda, government actions have eroded investor confidence, worsening the currency’s situation. He added that if Hungary had already adopted the euro, people would no longer need to worry about the forint’s day-to-day volatility.
While both global events and government financial policy are weighing on the currency, experts caution that only short-term measures might bring any stabilisation. In the long term, however, a more substantial recovery for the Hungarian currency remains uncertain.
UPDATE: EUR/HUF exchange rate reaches 405
The forint fell to a new low on the second day of the week, hitting 405.231 on Tuesday at around noon, Economx reported. It then went back below 405 then reached that level again after 2 PM.
Read also:
- Hungarian forint breaks currency exchange level, additional weakening on the horizon
- Addressing Budapest’s housing crisis: Proposal to restrict home purchases by non-EU nationals
Featured image: depositphotos.com
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3 Comments
The Real Person!
The Real Person!
“Struggles” ???
It continues on in a cataclysmic Free-Fall.
The central bank could stem the decline by supporting the value of the Forint (by selling foreign currency reserves and acting as a buyer of Forints) but they’re clearly not doing so under order from the government. Fact is, a weak currency supports inbound tourism and depreciates the value of salaries expressed in Euros and Dollars, making the country more appealing to FDI, it cancels out the supposed above inflation salary increases while fuelling more domestic inflation. In the end a domestic worker earns more in Forints but finds that their expenses have increased by the same or to an even larger degree than their income, while expenditure involving conversion to foreign currency (like holidays abroad or purchasing imported goods) has become more expensive by the degree to which the Forint has lost value. This process is in the sole interests of foreign tourists and investment partners while merely maintaining, or even eroding the standard of living of the domestic population. Encouraging domestic tourism and foreign investment (driven not by the value add of Hungarian workers but by their low cost) is a much easier way to drive growth in the economy than supporting domestic small and medium sized enterprises. The latter would have the advantage of being both domestic owned businesses ensuring profits stay within the country as well as having the potential to massively scale up if they’re successful usually enhancing productivity due to economy of scale. Hungary is fairly unique in Europe in having next to no national economic champions, artificially inflated NER businesses dependent on political patronage don’t count and overall serve to erode the economic picture as they’re not inherently competitive in an open market. When government taxes them they merely take back a percentage of what they’re stuffed into them using other taxpayer’s funds.
The Real Person!
The Real Person!
Londonsteve.
Educational to Hungarians, in particular, who, in there millions, through intellectual in-ability, that evolves muchly through “low level” Education standards, primary and secondary, are FAILING to understand, the, growing HIGH Risk path, that the Orban – Fidesz Government continue to DRIVE Hungary deeper into.
Londonsteve, in giving “user friendly” examples – FACT’s, in addition to his commentary, that highlight – Hungary, under the Economic & Financial Policies, designed by the “Dud” – Minister of Finance – Mihaly Varga – approved by the current Prime Minister – Victor Mihaly. Orban and his Fidesz Government – will NEVER grow what is called CAPITAL – that cumulates into the Hungarian – the Governments having money to USE – for FUTURE “needs”.
Orban / Varga – in the 15 years they have been the “keepers of the purse” in Hungary, never have there Economic and Financial Policies, that have introduced – that include – they WILL build the Capital “worth” of Hungary.
Interfaced – another example of Hungary having NO capital could be rightfully argued muchly by the DEBT in BORROWINGS undertaken by Orban & Varga – the Fidesz Government, through the Hungarian Government having minute “real money” of its own, that has continuously seen “mounting” levels of BORROWINGS by Hungary, from China and Russia, that as I commentate, that the European Union – Debt which is compounded – the FACTUAL Government Debt exposure of Hungary – trends to a “nadir” place, that Hungary can’t SERVICE.
Hungary – No Capital.
Hungary – explanation(s) contained in Londonsteves commentary.
Hungary’s position, the PRESSURIZATION on Inflation – as is FACT – FAILING to be REPORTED in Hungary – we know who controls the PRESS, is in an “aggressive” up-side.
Hungary – the Forint, has NO solid reason(s) in the “growing” HAMMERING it is receiving, of not devaluing DEEPER against the Euro, and “all” other Major World Currencies.
Orban / Varga – the Fidesz Government have NO Ability – they have NO facilities in there Economic & Financial structure to – throgh Capital – Invest into the Hungarian “collapsing” Economy.
Londonsteve – explains, that through the Orban / Varga “wrongful” economic & financially direction they have set Hungary on, the RAMIFICATIONs have been – are being humongous in the effects FELT by millions of Hungarians.
The personal wealth of Hungarians in millions – we already have 1.1 million fellow Hungarians living in POVERTY, in an ageing society – decreasing population – that will NEVER, never, never GROW – under the Orban – Varga economic & financial “bastardized” plans.
Hungary – we are sadly in for WORSENING times.