Forint continues to strengthen: Sunday will be its black day?

The forint exchange rate against the euro continues to decrease despite the American inflation data and other external effects. But will that trend remain durable? For example, the Turkish elections may result in a plummet next week. At least, that is what experts said before. The forint seems to have become more resistant to external monetary and policy changes.

According to Világgazdaság, despite the USA announcing higher inflation data than expected, the forint continues to rise. The USD strengthened while the euro weakened, but the forint did not follow the European currency. Last year, such exchange rate changes considerably affected the Hungarian national currency.

Furthermore, the Hungarian central bank announced the reversal of the previous interest rate increase program this Tuesday. But the forint was not disturbed by that news even though its exchange rate is protected by the high Hungarian base interest rate (13 percent currently). At the moment, its currency exchange rate against the euro stands at 371.41, even though, on Thursday, it was above 372.

Forint among the favourites of the investors

Interestingly, last year, the Polish zloty and the Czech koruna were the better-performing regional currencies. However, the trend has changed. The Hungarian forint has become one of the favourites of the foreign investors, while the zloty’s and koruna’s currency exchange rates face more risks.

We wrote before about the presidential and parliamentary elections in Türkiye and their effects on the forint. President Erdogan could not win in the first round, but he will probably celebrate his victory this Sunday after the second round. Experts said the extension of the unorthodox Turkish economic policy might affect the forint badly. However, nothing happened after the first round and probably nothing will happen even after the second since the markets already priced that Erdogan will remain in his office.