On Monday 13 June, the forint broke all records: the euro rose above 400 forints, even reached 402. Is there still hope that the exchange rate will ever normalise? What could help the Hungarian currency? Read our article to find out.
According to privatbankar.hu, it was known that the euro would reach the 400 level sooner or later. At the end of February, the euro was at 370 forints. Many believe that if nothing happens to save the forint, we could reach 450 in less than 4 months.
More than three months ago, the Hungarian currency was brought down by the fact that the Russian-Ukrainian war made the forint the weakest link for investors in the Central and Eastern European region, and they started speculating against it, writes privatbankar.hu.
For a brief period in April, the euro was worth 366 forints, leading many to false hopes. People thought that they no longer had to worry about the forint, that everything was fine.
Then, at the end of April, the European Commission launched the rule of law procedure against Hungary. This was a sure sign of the forint’s deterioration because it threatened to deprive the Hungarian economy of EU funds.
It is the government that can do the most to prevent the forint from weakening further. First and foremost, by taking steps to stop the EU’s rule of law procedure, which would allow money from the recovery fund to start coming to Hungary.
Of course, the abolition of price freezes and the reduction of the overhead cuts, and the withdrawal of special taxes or their reduction may also convince the outside world and thus investors that it is worth keeping their money in our country – these exchanges may strengthen the forint. But the biggest impact would come from an agreement with the EU.
However, penzbankar.hu now sees little chance of government members even lifting a finger to make things better. At least this is the conclusion to be drawn from the repeatedly uttered statement by Márton Nagy, the Minister of Economic Development, that there is nothing wrong with the forint exchange rate, it is exactly where it should be.
Source: privatbankar.hu, dailynewshungary.com