The Hungarian currency has been losing its value for months, but it reached historic depth yesterday. In Monday morning, you could buy 1 EUR for more than 370 HUF. The currency’s weakening accelerated last week partly because of the USD’s strengthening. Yesterday we had to pay 329 HUF for 1 dollar and 441 HUF for 1 GBP. Even though it seemed on Monday afternoon that the HUF will strengthen a bit, in the evening it surrendered, and reached a new historic low: 370.2 HUF/EUR.
Hungarian forint losing its value rapidly
According to portfolio.hu, despite the Hungarian National Bank’s reference interest rise, the forint continued to lose its value even on Monday. The trend is the same in the case of the regional currencies. For example, the Polish prime minister said yesterday that they did what they could to strengthen zloty.
The reason is, the Hungarian business media outlet says, that
Joe Biden announced yesterday that they would nominate Jerome Powell to continue to lead the Fed.
As a result, the USD strengthened against the Euro and the Hungarian forint, as well. Of course, there are several other reasons like the increasing number of COVID patients in Central-Europe, or the weakening of the Turkish lira. Portfolio.hu says that these factors increase the financial risks of the region, so investors take their money away. 24.hu says that the emerging fourth wave might cause a new economic crisis in Hungary.
Government boosting inflation?
Even though it seemed on Monday afternoon that the HUF will strengthen a bit, in the evening it surrendered, and reached a new historic low: 370.2 HUF/EUR – 24.hu reported. Before, the forint’s historic low against the euro was at 369.19 – index.hu said.
As we reported before, the Hungarian government will distribute a lot of money before the 2022 general elections. The youth below 25 will not have to pay personal income tax from next January. The families raising children will get back part of or even all their personal income tax they paid in 2021. As a result, for example, family of three where both parents earn average salary
will get back almost 1.5 million HUF (4,000 EUR).
Furthermore, the pensioners got Historic high premium (80,000 HUF per capita) in November. Moreover, they will get a 13th month pension next February.
While the government would not like to introduce euro in Hungary, the united opposition would do so. In a recent interview the joint PM candiate of the opposition parties, Péter Márki-Zay, said that there is an agreement between the six parties and the Everyone’s Hungary Movement that they would start the process provided they win the 2022 parliamentary elections.
Source: portfolio.hu, index.hu, 24.hu
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