Forint plunges with little hope of reversal

Just last week, we reported how the forint was holding firm despite the central bank’s long-awaited rate cuts (music to the government’s ears ahead of elections), thanks to cooling inflation and the Hungarian National Bank’s steady hand. Now, Trump’s Iranian strikes threaten to upend it all.

Hungary braced for fallout from US-Iran war

Hungary stands to suffer grievously, both economically and on the currency front, from America’s and Israel’s Saturday assault on Iran. Tehran has now sealed off the Strait of Hormuz to shipping, unleashing unprecedented turmoil on global energy markets and supply chains alike.

The forint is reeling from the Iranian conflict on multiple fronts. A swift analysis by Portfolio.hu reveals it at a one-month low, with a trajectory even bleaker than its regional peers. Gas prices have rocketed—up 50% alone on Monday. With the entire region hooked on energy imports, these surges are battering national currencies everywhere: Poland’s zloty down 1.2%, the Czech koruna and Romanian leu in the red too.

Forint lags even behind battered regional rivals

Yet the forint is underperforming even against these neighbours—and globally, few currencies are faring worse. Portfolio pins the blame on a “general overvaluation correction” and flight-to-safety jitters hammering all emerging-market currencies.

By early evening, one euro fetched 391 forints, a dollar 337.8. The forint hasn’t been this feeble against the euro since last October and December; little over a year ago, it topped 400. Against the dollar, it last hit these depths in early November. Portfolio noted a late evening uptick: 387 forints per euro, 334 per dollar.

Forint’s vulnerability laid bare

Today’s intraday plunge of 10.5 units is the worst since 15 March 2023—nearly three years ago.

The forint, Portfolio observes, is a high-beta currency by tradition: hypersensitive to shocks and risks.

The central bank could yet step in. Reserves are at a historic peak, topping €56 billion, giving it ample forex firepower to prop up the forint. Such a move, though, would clash with the MNB’s insistence that it has no exchange-rate target. For now, policymakers are weighing intervention against hopes for a swift war’s end. Trump offers scant cheer: he predicts at least four weeks of fighting, likely longer.

If you missed our previous articles concerning the Hungarian forint:

• Hungarian forint at multi‑year high against euro and dollar: could it gain another 10% in April?
• Hungarian currency guide: Everything visitors and expats need to know about money in Hungary