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.