Hungarian forint became one of the world’s favourite currencies!
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The public opinion about the Hungarian national currency turned upside down in only weeks, an analyst of the Amundi Fund wrote to a leading Hungarian economy-focused news outlet. He added that the forint is one of the investors’ favourite currencies.
Hungarian forint performs well…
Péter Kiss’s article was published in Portfolio today, arguing that the forint is one of the world’s best-performing currencies in 2023. He supports that trend with arguments, but warns that 2022 was one of the worst years since the new currency’s introduction in 1946. And forint is still very vulnerable.
He names three main reasons behind the good performance. To start with, the “carry” of the forint is currently the world’s seventh highest. Carry means the interest rate difference between the carry currency (forint) and other so-called funding currencies. That has been 18 percent since last October, much higher than the euro’s 3 percent and the USD’s 5 percent.
Hungary’s EU membership is an additional reason investors put their money in the forint. Other countries having high carry values like Argentina, Türkiye, Egypt, Ukraine, Nigeria, Russia are not EU members. The Polish zloty or the Czech koruna has good carry values (7.3 percent and 6.7 percent), but those numbers are half the Hungarian ones.
Who’s fantasy is this? Hungarian forint as an investment vehicle? A country with the highest tax/vat!? Seriously?
😮 Holy cow!
After the Easter holidays I must tell all my overseas friends to BUY, BUY BUY all the HUF they can, we might all become George Soroses. 🙂 😀
The forint plummeted even more than the Euro immediately after the Russian invasion of Ukraine in Feb 2022 and bottomed in Oct 2022. The drop was excessive and the forint has recovered back to more or less near where it should be at its’ long-term multi-year trend line relative to USD. There is little room for any further appreciation of the forint and it will soon resume its’ long-term trend which is a continuous gradual depreciation relative to the USD. Hungary has major economic problems which will continue to weigh on the forint.