Hungarian forint the weakest this year; decline may continue due to national bank decisions
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The Hungarian forint was the weakest this week in January, but more decline may come because of the Orbán cabinet’s policy changes.
Forint may continue to decline
The Hungarian forint reached its lowest this week in 2024 because of two main reasons. One is the fall of the regional currencies, while the other is that the markets started to price a future considerable base rate cut that can reach even 100 base points.
The forint started this week from a 382/EUR level, dropping to 388/EUR on Wednesday and Friday. That marks a three-month low. One of the minor reasons was that the government modified the rules concerning the excess profit taxes of the Hungarian pharmaceutical companies. Later, the finance minister and Richter both said the market misunderstood the new rules, but that could not ease the struggle of the Hungarian national currency.
Next Tuesday and Wednesday may decide about the future of the forint. On Tuesday, the Hungarian National Bank is expected to cut the base rate by 100 points. On Wednesday, the US Federal Reserve will decide about the base rate, which will also affect the Hungarian currency – index.hu wrote.
Meanwhile, Mihály Varga, Hungary’s finance minister, said that “the time has come for yields and the base rate to decline.” That may result in the forint’s ongoing depreciation.
Mihaly Varga, the Minister of Finance, we are paying a deepening BLACK Hole, for his decisions direction and policies of the Economy – Financial / Economic picture that he and the Prime Minister – Victor Orban “jointly’ signed off on, that have placed us in the cataclysmic disaster we are living with in Hungary.