Forint takes a big hit: sharp weakening in a short time

On Tuesday, the forint weakened by 1.5-2% against the major currencies compared to its early morning quotation on the interbank foreign exchange market. In the evening, the EUR/HUF exchange rate stood above 387.

The euro was quoted at HUF 387.86 at 6 PM on Tuesday, down from HUF 382.15 early in the morning, privatbankar.hu reports.

The dollar rose to HUF 361.49 from HUF 354.20 and the Swiss franc to HUF 406.75 from HUF 400.11.

According to Tőzsdefórum, yesterday, the EUR/HUF crossed even the 388 level. The last time the forint was this weak was in mid-August, when a rapid rebound followed the fall.

As we reported yesterday, according to Bloomberg, the Hungarian state may buy a majority stake in Budapest Airport. This has been rumoured for more than 3 years; however, there is currently no information on the expected value of the transaction (Bloomberg speculates that the transaction could be worth up to EUR 4 billions). However, analysts believe that this news could also have a weakening effect on the forint, as the possible purchase could weaken the Hungarian budget balance.

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