Forint reaches new historic lows against EUR, GBP, USD, 420/EUR rate expected in 2025
The forint is struggling against the euro, the British pound, the American dollar and the Polish zloty again. Against the GBP, it reached a new historic low yesterday (505/GBP), but it fell to a historic low against the zloty as well. Experts believe that the forint would pass a new psychological barrier in 2025. However, the new Hungarian National Bank governor seems supportive towards the introduction of the euro.
Hungarian forint reached new historic lows
The Hungarian forint was at a historic low against the euro in October 2022 with 434.11. Thankfully, that exchange rate did not remain for a long time. Due to the intervention of the Hungarian National Bank, the forint was saved then. But it seems the relief was only temporary. The exchange rate of the Hungarian national currency has been worsening ever since. Yesterday, it reached 416/EUR and, experts believe, it will exceed the 420/EUR limit in 2025.
The bad news is that the value loss is gradual, and the Hungarian National Bank does not seem to want to intervene and save it. Some economists believe the Orbán cabinet is weakening the forint on purpose because they need a weak forint to preserve the country’s competitiveness and make it attractive to foreign companies for exports.
The British pound reached a historic record against the forint yesterday with 505/GBP. The American dollar also strengthened, exceeding the 400/USD limit, Portfolio wrote.
New national bank governor for introducing the euro in Hungary
According to Economx, the currency exchange rate of the euro was above 416 today, and, in 2025, we will reach the 420/EUR level.
Based on the prognosis of the Hungarian National Bank, inflation in 2025 will be between 3.3% and 4.1%. ING Bank believes the average inflation will be around 4.2%. The bank expects a significant rise in state incomes due to higher taxes. Meanwhile, they listed the currency exchange rate swings of the forint and the expected significant wage rise as risks.
The bank expects the forint to end the year at the 410-413/EUR threshold. Mihály Varga, the Hungarian National Bank’s governor after March, could not define an exchange rate that would help the Hungarian economy next year.
However, during his hearing in the Parliament’s Economic Committee, he surprised the public by openly expressing support for the euro’s introduction in Hungary. Economist Géza Sebestyén said nobody could tell when Hungary would become a member of the eurozone but added that 2035 could be a realistic target.
We wrote about the spontaneous euroisation in THIS article.
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