Hungarian forint breaks currency exchange level, additional weakening on the horizon
We have reported earlies that this week was not the heyday of the Hungarian forint. It happened before that the exchange rate increased above 400/EUR, but did not remain there permanently. Now, it seems the forint broke an important currency exchange level, and experts believe it can reach 410/EUR soon.
Hungarian forint broke exchange rate level
According to Index, external reasons like the price rise of gas resulted in a 10% weakening in the currency exchange rate of the Hungarian forint. Our currency was weaker against the euro in December 2022 and against the dollar in October 2023. On Saturday, Israel carried out attacks against Iran, which will probably make the situation worse. Currently, the exchange rate stands above 404/EUR.
Dániel Molnár, a senior analyst at Makronóm Institute, said the international atmosphere was the key reason behind the fall. The US dollar strengthened against the euro, which resulted in the weakening of the forint and the Czech koruna. Furthermore, the Hungarian National Bank did not increase the base interest rate on Tuesday. The MNB is in a reduction program but postponed base interest rate decrease for months, so the MNB did what it could to halt the negative trend.
György Matolcsy, the governor of the Hungarian National Bank. He will only intervene if a catastrophe happens. Photo: FB/MNB
The increasing probability of Trump’s success was also bad news for the forint since the American dollar is expected to strengthen due to the higher tariffs Trump promises. We covered the disadvantageous consequences of Trump’s victory on the Hungarian economy in THIS article yesterday.
More disturbing news may emerge
According to Index, the forint changed its currency exchange level and is expected to remain in the 400-410/EUR range. Meanwhile, the US dollar will be in the 365-375 domain, Zoltán Varga, an analyst of Equilor Befektetési Ltd, said. Mr Varga added that the higher jobless rate the KSH shared on Friday was also disadvantageous for the forint.
Next week, multiple Hungarian and international economic data will emerge affecting the forint. For example, the Q3 Hungarian GDP growth data, the GDP increase of Germany, the USA and the Eurozone, the number of American employees employed in the private sector, the German inflation, the Japanese base interest rate, the Eurozone inflation data, etc.
Source: depositphotos.com
S+P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on Hungary in a scheduled review on Friday. The outlook is stable. In a statement released late Friday, the National Economy Ministry attributed the high degree of confidence in Hungary in the reports of all three big credit rating agencies to the stability and resilience of the economy. However, that news did not help the Hungarian forint. On Friday, when the news emerged, the exchange rate was below 404, now it is above.
New tendency: Hungarians keep their savings in euro
According to economx.hu, it is understandable why many Hungarians decide to keep their money in euros instead of forints. Apart from the psychological effect of seeing the 400/EUR exchange rate, the Orbán cabinet plans significant money transfers for the voters before the 2026 general elections. Furthermore, most EU funds are still unavailable for Hungary, and it does not seem the Hungarian government will agree with the European Commission and settle the controversial issues soon.
Read also:
- Minister talks about the Hungarian economy’s future: 3-4% GDP growth, SME program, strict rules for Airbnb, rentals – read more HERE
- Orbán cabinet introduces stricter rules on guest worker employment
Featured image: depositphotos.com
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3 Comments
The Real Person!
The Real Person!
FACT.
We know the principle culprit, that HAS caused the on-going destruction of the Hungarian Economy, that includes, the on-going DEVALUATION of the forint – that “Dud” being the Minister of Finance of the Orban led – Fidesz Government of Hungary – Mihaly Varga.
Varga – the Orban – Fidesz Government are STRANGULATED, in a “blackened” corner, faces to the wall, in what they can’t don’t have the facilities – to reverse the collapsing economy and the weakening forint in Hungary.
Varga – the Orban Government maybe BORROW “deeper” with China or Russia – another, if they do, perilous decision on the FUTURE of Hungary, with the amount – the GARGANTUAN debt this Orban – Fidesz Government have to SERVICE, inclusive of the European Unions “matters”.
Varga / Orban – will they HIT harder the people, the businesses/corporations of Hungary, through the introduction of HIGHER taxes ???
YES.
The Central Bank of Hungary, are in a HORRIFIC conundrum.
There ROLE, there Responsibilities – major role being CURRENCY – they like Varga & Orban – decisions arising out of the Central Bank of Hungary – to STABLIZE – the Forint, grows in being un-manageable, that will see the continuation of the “free fall” to lower levels of the Forint.
Will interest rates be Increased ?
Interesting weeks are before us – as the PIT our Economic and Financial, inclusive of currency WILL descend deeper into an un-known nadir.
The YOKE meaning ???
WORSENING times – Deterioration ahead – Hungary.
The Real Person!
The Real Person!
Wondering how can orban say “make Europe great again” (wow, very original) when the economy of gis country is going backwards. Amazing the amount of “support” that he still has, maybe in some years Hungary will be the Venezuela of the eu, Hungary even has its own Maduro in power.
The Real Person!
The Real Person!
NOTHING is getting cheaper in Hungary.
SUPPORT for the Orban – the Fidesz Government of Hungary factually is under GROWING rightfully PRESSURIZATION.
Facts are there that SUPPORT the CHAOS overall – Economically, right throughout the Governance of Hungary, under the Orban – Fidesz Government.
Hungarians – though multitude of numbers of citizens – millions in FACT – NATIONALLY – have come, continue to come – and grow in coming – to there senses, realizing the FAILINGS of 15 years being Governed by the Orban – Fidesz Government, there BASTARDIZATION of Hungary, delivering us as a country to the state position we are in today.
MASS numbers of citizens are still needed, the POWER of PEOPLE – to totally eradicate dispose of this Government – who continue to DESTROY this country.
SOLIDARITY – being led by an OPPOSTION Party that only speaks in TRUTH, confronting the Orban – Fidesz Government, there principle weaponry as an alternative Government, that are going to CREED – in there Policy decision making firstly ;
(1) – what’s BEST firstly for ALL Hungarians
and secondly;
(2) – what’s BEST for Hungary.
Orban – the Fidesz Government of Hungary – must be FOUGHT / CHALLENGED the inflicts – displays exposes deeper – in HUMILIATING the “Heinous” functionality of the Orban – Fidesz Government of Hungary.
The OPPOSTION tabling or replying to the Orban led Fidesz Government of Hungary that is Truth and supported by FACTS.
If this is not the CREED of the OPPOSITION Party – HONESTY & Truth if needed tabling/presenting of FACT’s – in it’s presentation as an alternative Government, as a country Hungary will DEEPEN the likelihood of it’s already appearing PERILOUS place and cataclysmically DESTROY it-self.