Hungarian forint breaks 1.5-year record following central bank’s rate freeze

The Hungarian forint strengthened sharply on Wednesday, reaching levels not seen since early 2024 and briefly approaching HUF 381 to the euro. By early evening, the currency traded below 381.7, marking its strongest performance in around one and a half years, according to market data.

The forint’s rally began late Wednesday morning, when it climbed from above 384 to the 381 range within hours. Earlier in the day, the euro had been trading above HUF 384, but steady gains pushed the Hungarian currency to a new peak shortly before 7 PM, Telex reported.

Central bank decision reassures investors

Analysts attribute the forint’s sudden strengthening to Tuesday’s decision by the Monetary Council of the National Bank of Hungary (MNB) to keep the base rate unchanged at 6.5%, according to HVG. The move signalled the central bank’s commitment to maintaining tight monetary conditions amid continuing inflation concerns.

MNB Governor Mihály Varga reinforced this message during Tuesday’s press briefing, emphasising that Hungary’s fight against inflation is “not yet over”, suggesting that high interest rates could remain in place for an extended period. His comments appear to have reassured investors that no premature easing is expected, thus easing concerns about potential market volatility.

This reassurance helped spark the forint’s rapid strengthening: between noon and 1:30 PM on Wednesday, the currency surged from 383.4 to 381.2, a jump rarely seen within such a short timeframe.