On Thursday, the euro was above HUF 433 forints, while the dollar was HUF 448. The forint is at historic lows against all major currencies. Economists and traders also expect inflation to rise. They believe that the war is not the main triggering factor, but the roots of the issue can be found within the country’s borders
Another negative peak
The Hungarian forint has suffered another record plunge. One dollar was HUF 448 on Thursday morning, while the euro was above HUF 433, napi.hu reports.
The forint has been falling throughout the entire week. Each day marks another historic low and another negative record. Experts say further weakening of the forint could be on the way. The next days and weeks could bring new lows.
Read alsoHungarian forint is in a slump again: euro has risen by 30 forints in a month
“The forint continues to weaken. On Wednesday, the exchange rate rose for the seventh day in a row, the first time since September 2020. In fact, it is breaking a record high for the tenth time in the last 11 days. 433 is a psychological level, but there is no substantial resistance at such unprecedented highs. The distance from the 13-day moving average (420.7) is also becoming more significant, also suggesting at least a temporary halt. However, a trend reversal (below 420 levels) is unlikely,” Raiffeisen wrote.
Meanwhile, Magyar Bankholding expected the euro to end the year at HUF 395 in its quarterly report. They based this on the fact that they believed the Hungarian government would reach an agreement with Brussels. The arrival of EU money could strengthen the forint.
How long can the weakening continue?
The Hungarian government explains the weakening of the forint by the war situation and the sanctions imposed by Brussels. However, economists and traders believe that the main triggering factor is not the war, but the roots of the issue can be found within the country’s borders.
Experts reckon that the forint’s plunge could continue. One euro could cost up to HUF 500, rtl.hu reports. Bread prices in Hungary have risen the most in the European Union. Products imported from abroad are already more expensive due to inflation.
According to István Dedák, the forint is likely to weaken to such a level that one euro could be worth HUF 460. “However, it is also possible that if things go well, it will go back below HUF 400,” he added.
Read alsoNegative prospects for next year: terrible price rises will continue in Hungary
Source: napi.hu, rtl.hu
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