Hungarian forint plummets, 400 EUR/HUF dangerously close
The Hungarian forint has faced multiple setbacks recently, resulting in a significant downturn. The currency’s future remains uncertain, with its decline showing no clear end.
Photo: depositphotos.com
On Wednesday, the forint’s value dropped sharply. It began the day trading around 390 to the euro and 359.5 to the dollar, but these levels quickly became outdated, Világgazdaság reports. By the end of the trading day, the forint had depreciated by 0.84%, reaching 393.45 against the euro, and by 0.72%, falling to 362.12 against the dollar.
Reasons behind the weakening of the forint
Several factors have contributed to this steep decline:
- The Hungarian National Bank (MNB) recently announced an interest rate cut.
- Following this, MNB Deputy Governor Barnabás Virág indicated that one or possibly two more rate cuts could occur this year.
- Additionally, new data from the Purchasing Managers Index (PMI) suggests continued economic contraction in Europe’s largest economy.
The weak German PMI figures indicate low inflationary pressures, which typically lead to expectations of further interest rate cuts. This, combined with the MNB’s potential future rate reductions, suggests that the forint might lose further support both domestically and across Europe, forecasting a continued weakening trend.
Investors, likely alarmed by the narrowing interest rate differential in Hungary and ongoing political issues, seem to be withdrawing from the Hungarian market. The full extent of the forint’s potential decline is difficult to predict, but some analysts have suggested that an exchange rate of 425 to the euro could be possible by summer.
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4 Comments
It may be the beginning of the end, of the forint and the 400 EUR/HUF and on-going suppressive forceful de-valuation will GROW.
What a Prime Minister – Victor Mihaly Orban.
What a Finance Minister – Mihaly Varga.
What a Government.
What have they DELIVERED us over the greater part of 15 years ?
Hungary into a state representing a DISASTER that WORSENS.
What’s going to be left for us to attempt a SALVAGE process ???
Devaluing the national currency is part of the conjuring trick the government performs in order to keep a lid on wage increases payable by foreign investors. Wages may be increasing in Forints but the ‘real’ value of these wages expressed in Euros or Dollars is largely stagnant due to the continual deflation in the value of the Forint. Employees may experience a temporary rise in the value of their wages even increasing above inflation but this rise will be soon eroded when the weaker purchasing power of the Forint feeds into higher prices for food and consumer goods. Although wages expressed in Forints are vastly higher than they were 20 years ago, increases in living standards are conspicuous by their absence, not helped by huge recent inflation in property prices and rents.
Brasil parece seguir a Hungria… Ops…está seguindo com o valor do REAL, em 1 real = 5,60 US$
Londonsteve – Concur.
Hungary – ‘strip it all back’ in the core componentry of it’s Economic & Financial functionality – it’s engine room, it’s under massive growing PRESSURIZATION.
Hungary – does not HAVE fundamentals in it’s Economic & Financial ‘balance sheet’ that are of a STABILIZATIONAL base or factor, in it’s Economy, that could play perform a role that ‘repels’ – the mounting PRESSURES on the Hungarian Economy.
Hungary, and there are numbers of REASON(s) it is in a nadir – Financial & Economic place that resembles a WRECK, has not been helped by just not only a Prime Minister that has changed the course – the direction, to ’embrace’ DEMOCRACY rather than be it’s DISTILLATION – for any hope of the future there may or not be for Hungary.
Hungary’s – Minister of Finance – Mihaly Varga of 8 plus years – it is PROOF by the WRONGFULNESS of his Financial & Economic ideas & philosophy’s – his introduced POLICIES – have been the MAJOR reason, of the near collapsed place that is the Economic & Financial place of Hungary.
Government DEBT – acquired built up over time under the Orban – Fidesz Government of Hungary – the SERVICING – satisfying – re-payment of these GIGANTIC Debts – the BORROWINGS of the Orban – Fidesz Government of Hungary – across the desk of the present Minister of Finance – Mihaly Varga – signed & approved – DAUNTING +.
Varga – I read in past days is stating, that the Hungarian Economy has returned to a Growth Path.
The on-going en-dangerment – the WRECK – through his INCOMPETENCE – Varga – has delivered Hungary, to, at this point in time, that will WORSEN, leaving this Varga – in the Chair as their Finance Minister of Hungary – Stupidity.