Hungary’s central bank has stepped in to curb the rapid strengthening of the forint after the currency surged to levels many analysts believe are too strong for the country’s economy and exporters.
The sharp appreciation followed the landslide election victory of the Tisza Party, which significantly boosted investor confidence in Hungary’s economic outlook and policy direction. However, economists now warn that a persistently strong forint could create new challenges for businesses and economic growth.
Central bank acts to weaken the forint
Over the past month, the Hungarian currency strengthened by around 8% against the euro, while its annual gain reached more than 11%. In recent days, the exchange rate briefly moved below HUF 355 per euro, a level considered highly unfavourable for export-oriented Hungarian companies, whose revenues are largely earned in foreign currencies.
In response, the Magyar Nemzeti Bank (MNB) introduced a technical rate cut on Tuesday. Although the base interest rate remained unchanged at 6.25%, the central bank reduced accepted offers in its euro liquidity tenders, effectively lowering real forint interest rates by roughly 50 basis points to 5.25%.
The move immediately weakened the currency slightly, with the euro climbing from around HUF 356 to above HUF 359. According to analysts at CIB Bank, the forint’s rise had become excessively rapid compared to the actual performance of the Hungarian economy, writes Népszava.
Confidence boost after political shift
Mariann Trippon, chief analyst at CIB Bank, said investor optimism after the Tisza Party’s election victory played a major role in the strengthening trend. Markets appear to expect a more stable and predictable economic policy environment under the new government.
At the same time, Trippon noted that the forint has appreciated by nearly 10% in real terms over the past two years, despite productivity growth remaining essentially flat. Such a rapid adjustment, she argued, is difficult for Hungarian companies to adapt to.
She also suggested that the era of the forint’s long-term weakening may have ended, although the central bank is likely to resist any further excessive strengthening. Additional interest rate cuts could therefore arrive in June or July if market conditions allow.
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Stable exchange rate expected
The new government has also signalled that it does not prioritise further forint appreciation. Finance Minister András Kármán recently indicated that reducing government bond yields matters more than reflecting economic convergence through the exchange rate itself.
Despite the recent rally, CIB Bank expects the forint to stabilise in the coming months. The bank forecasts an exchange rate of HUF 363 per euro by the end of this year and around HUF 366.6 by the end of 2027, which would effectively mean long-term exchange-rate stability after inflation is taken into account.
Analysts added that Hungary still faces significant economic challenges, including high budget deficits, rising debt levels and the need for long-term reforms in education, healthcare and infrastructure.
K&H Bank’s chief analyst about the Hungarian euro, the forint’s bright future and the rising inflation
Featured image: depositphotos.com
HOPE – major decision making on such is the subject of this article, which is “encouraging” pleasing news for Hungary, post the Humiliating and rightful DOWNFALL – of Victor Mihaly. Orban and his Fidesz Government, that the Governor of the Central Bank is NOT a KEY player in decision making process.
Mihaly Varga, a “Founding” Father of the Fidesz Political Party along with his FRIEND – the disgraced former leader Prime Minister of Hungary of (16) sixteen years – Victor Mihaly. Orban – a former – Minister of Finance in the Orban led Government of over a decade and prior to that positions muchly involved in the Financial and Economic direction of Hungary – was Mihaly Varga.
Mihaly Varga – “inner sanctum” of the Fidesz Political “machine”.
Friendships with the Oligarchy that as the Minister of Finance an “ear” to Victor Mihaly. Orban – was a DESIGNER – to satisfy those of Victor Mihaly. Orbans “inner sanctum” – plus Orban that FAVOURED to “pockets” of the Oligarchy and those of the “inner sanctum” – that clearly placed the People of Hungary in SECOND place – getting the “left overs”.
Mihaly Varga when (3) three years past transferred” – a “gift of favour” by Victor Mihaly. Orban – from being the Minister of Finance of Hungary to the postion, as Governor of the Central Bank of Hungary, with a send off “whisper” in Vargas ear, that through loyalty, your service, your obedience and support to me and the party you in part founded – that after your time as the Central Bank Governor, the postion as President of Hungary – is “penciled” in – your name – Mihaly Varga.
REMEMBER – we must Hungarians that when Mihaly Varga was “shuffled” off to become as he is WRONGFULLY now and NEED’s removing / replacing – as the Governor of the Central Bank of Hungary, he, – Mihaly Varga left the “balance sheet” of Hungary is a GARGANTUAN mess an economic and financial place of CHAOS.
Mihaly Varga – his LEGACY to Hungary as Finance Minister, his lack of respect inside the European Union and over time the loss of trust in his name through his FRIENDSHIP with Victor Mihaly. Orban – he is HIGH Risk – with the “new” forward thinking style – built on and around, the promise of being an open and TRANSPARENT – a Listening Government – under Peter Magyar / Tisza.
Mihaly Varga – must FALL.
Varga – his LEGACY included muchly at the end, the final humiliating disgraced DOWNFALL of Victor Mihaly. Orban – just on FACT, we have in Hungary – 3 million fellow Hungarians living in POVERTY – this is a LEGACY that can’t let be escaped associated being a Major DESIGNER of by – Mihaly Varga.
Varga – can’t be allowed as did the name – Albert Speer in his “friendship” at that time of History – 1939-1945 with his “Demigod” – Leader be ALLOWED – to claim – “I knew NOTHING”.
Mihaly Varga designed what in April 2026 – the DOWNFALL of the Orban / Fidesz Government – he was the Architect in excess of a decade his POLICIES that all FAILED – signed off and agreed by Victor Mihaly. Orban / Fidesz – that we know as FACT – the SHAMBLES we have and will Righten – being the state / condition of the economic and financial balance SLAUGHTERED position, left us in the LEGACY of – Mihaly Varga.
It must NOT be FORGOTTEN.