The forint surprised everyone in 2025, while euro savers took a hit

Many people believe that keeping savings in euros is one of the simplest ways to protect themselves against a weakening Hungarian forint. But 2025 proved to be a rare exception: the forint strengthened, and those who exchanged their money into euros at the beginning of the year often found that by the end of the year their savings were worth less in forints.

According to calculations by Bankmonitor, the forint gained 6.77 percent against the euro in 2025. That alone was enough to reduce the forint value of money parked in euros by year’s end.

And the forint’s rise was not limited to the euro. As Portfolio reported, the move is also striking against the US dollar. In recent days the dollar slipped below 317, weakening by nearly 3 forints in a single afternoon.

Why could the forint strengthen despite higher inflation at home?

At first glance, many people instinctively point to inflation: if prices rise faster in Hungary, the forint should weaken. Over the long run this often holds true, but in any given year exchange rates can be driven far more strongly by other factors.

In 2025, one of the most important was interest rates. Hungarian rates remained significantly higher than in the eurozone, and in several countries across the region they fell to lower levels. This gap pushed many investors toward holding forints, since it offered the chance of earning higher returns.

Several analyses also highlighted that the Hungarian central bank kept its base rate elevated for longer, while the European Central Bank and other central banks either cut rates or did not raise them to the same extent.

This meant that forint-denominated assets offered higher yields than euro-based ones, making the Hungarian currency more attractive to investors — and strengthening the exchange rate.

In practice, this is what happens: part of the market sells euros, buys forints, and then places that money into forint assets that pay higher interest. If enough investors do this at the same time, the forint naturally gains strength.

International markets also supported the forint

The forint’s movement was not the only unusual story of 2025. International currency markets were generally more favorable to Central and Eastern European currencies. One key reason was that several regional currencies — including the forint — offered higher yields than the euro.

Investors often try to profit in such environments by borrowing in a low-interest currency (such as the euro), then exchanging the money into a currency that pays higher rates.

So for many, the surprise last year was not that the forint performed well, but that the euro — in this particular market environment — did not act as the automatic safety net people expected.

At the same time, this does not mean that holding euros is a bad long-term choice, or that the forint will remain strong permanently. Over shorter periods, currency markets often move according to a very different logic than everyday experience suggests, and drawing sweeping conclusions from a single year can be risky.

For most savers, the main lesson is that foreign currency is not automatically “safe” — it can become a risk in itself. This is why many people prefer to spread their savings across multiple currencies instead of betting everything on a single exchange rate.

Read more about the political debate around the euro in Hungary and the historic pledge made by Péter Magyar:

• Poll-leader Péter Magyar makes historic pledge on the Hungarian euro introduction