Hungarian forint at breaking point: Near-historic low against pound sparks concern
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The Hungarian forint has plummeted to a two-year low against the British pound, with HUF 501.5 required to purchase a single GBP on Monday morning. This is just shy of the all-time record of HUF 502.9, illustrating the domestic currency’s sustained weakness. The euro-forint exchange rate has also breached new lows, with the common European currency trading above HUF 415, marking its weakest performance in two years.
Weakening: Regional and global factors in play
The Hungarian forint’s poor performance extends beyond major currencies, as it also hit unprecedented lows against the Polish złoty and the Czech koruna, Világgazdaság reports. Analysts point to several key factors driving the depreciation. Chief among them is Moody’s recent downgrade of Hungary’s credit rating outlook from stable to negative. This shift, announced late last Friday, has shaken investor confidence, prompting a reassessment of regional holdings.
The downgrade reflects concerns over Hungary’s governance and its potential loss of EU funds, exacerbating fears about the country’s fiscal stability. Simultaneously, global market trends have added to the pressure, with the US dollar gaining strength. The dollar index (DXY), which measures the greenback against a basket of currencies, climbed 0.47%, signalling broad-based demand for safer assets.
Policy dilemma: Balancing rates and stability
Economic experts like Viktor Zsiday, portfolio manager at Citadella Fund, highlight deeper systemic issues. In Portfolio’s article, Zsiday argues that Hungary’s current interest rate policies are insufficient to stabilise the currency. Despite recent rate cuts aimed at stimulating growth, these adjustments have inadvertently fueled the Hungarian forint’s slide.
As Mr. Bóka insists – we are an example to all! Facts, data and Politicians for you.
It will WORSEN.
The “Worth” of the Forint, just continues into Oblivion.
Increasing pressurization, cascading, engulfing ALL the major componentry of the Hungarian economy, that NO end to this “torrent” – this “Deluge” in fact, can be seen, that could be a stabilization point, that shreds, gives indication, the on-going downfall or collapse of the Hungarian economy is near FACT.
The Central Bank of Hungary, that are SUBSERVIENT – to the Orban led Fidesz Government of Hungary, there Minister of Finance – Mihaly Varga, principally “calling the shots” – from his desk, the making of decisions on interest rates in Hungary, that CONFIRMS – that Mihaly Varga AGAIN – just as he has, his Policy’s as the Finance Minister of Hungary, in sending Hungary’s Financial & Economic position, into, on the “Cusp” of near devastation – collapse.
The decision, “powered” by Varga, the Governments influence over the Central Bank of Hungary, to leave interest rates at there current level, being 6.5% – continuous rhetoric or “propaganda” – arising out of the Finance Minister in belief, the Hungarian economy can sustain Justify and afford – the interest rate at its present % – proves AGAIN – the Orban led Government of Hungary – the Minister of Finance – Mihaly Varga, they, jointly, with the Hungarian Central Bank – have got it WRONG.
Do the Maths – using February 2020 as a starting point, remembering from that date – the entire Housing & Construction Industry in Hungary inclusive of Hotels, the GROWTH of it.
The Hungarian Economy post February 2020 – do the maths, the Economic & Financial performance of Hungary in those nearing (5) five years which HIGHLIGHTS – the interest level of 6.5% currently in Hungary, is un-justified.
The “mauling” on-going of the Forint, that displays vividly / clearly, the LACK of confidence in it’s WORTH, not helped by Hungary, being an importer, that cost factor(s) will “sky rocket” being Hungary, that is reliant on Imports.
Inflation in Hungary – will RISE.
Mihaly Varga, as the Finance Minister of Hungary near on a decade “in that chair” plus “other” years, he has held position(s) of influence, in the Economic & Financial “landscape” of Hungary, his performance, reputation, what he has DELIVERED Hungary – is an ABOMINATION.
The “subservient” role, played out by the Central Bank of Hungary, under “orders” principally from the desk of Mihaly Varga, as the Minister of Finance of the Orban led Fidesz Government of Hungary, that in announcement, in recent days, that Varga, will be the “incumbent” next Governor of the Central Bank of Hungary is ABOMINAL.
We should feel sorry for all those Hungarians whose wages are paid by Forint, but they have a chance to get rid of Orbán’s dumb cronies in the next election.
Just look at the history of Forint since Orbán with his economically unintelligent chums got the right to govern.
Those involved should have had lessons abroad in the West in economics and finance.
In the past, sadly, the Soviets were dominating the Hungarian government and their Hungarian colleagues were not involved in economics and finance and the likes of Orbán were left without any real knowledge of the subject.
If only Orbán followed the Austrians, then Hungary would have the Euro like them, making the Hungarians equal with them.
This is far more an indication of foreign interference and financial pressure which certain western governments are exerting on the forint in an attempt to destabilise Victor Orbans government. This is in part being undertaken prior to Donald Trump’s inauguration in an effort to weaken his support in Europe