Forint Rate Impacted by Russia-Ukraine Conflict

Budapest, August 29 (MTI) – Fluctuations in the rate of the Hungarian currency on Thursday and Friday were clearly related to developments in the conflict between Russia and Ukraine, Quaestor analyst Peter Mester told MTI, adding that he expected that tendency to continue next week.

The forint on Friday morning weakened nearly to 316.5 against the euro before starting to firm. Further strengthening of the euro was hindered by low annual inflation and high unemployment in the euro area, as well as a “technical barrier” against the forint at the 316-317 level, the analyst said.

The forint fell 1 percent on Thursday afternoon to trade at levels seen three weeks ago.

Mester warned that the forint could further weaken in the next 6-12 months, in wake of a “war of sanctions” between Russia and countries of the West. A significant strengthening of the forint could only be expected if the situation in eastern Ukraine should ease considerably, and the US Federal Reserve postponed an expected hike of its base rate, he added.

At noon on Friday, the forint traded at 315.72 against the euro, 239.60 against the dollar, and at 261.82 against Swiss francs.

Source: http://mtva.hu/hu/hungary-matters