Morgan Stanley predicts euro could reach 410 forints amid worsening economic outlook
Morgan Stanley has forecasted a difficult period ahead for Hungary’s currency, suggesting the euro-to-forint exchange rate could rise as high as HUF 410.
Morgan Stanley advises to short the forint
According to Economx, the American financial institution pointed to increasing risks in Hungary’s economy and advised its clients to short the forint. According to their analysts, the target exchange rate is 410 forints to the euro, which they believe is within reach.
Their rationale for this projection is based on the growing concerns regarding both Hungary’s fiscal and monetary policies. While it’s unclear when this trading recommendation was communicated to clients, it’s worth noting that on Monday, the forint performed poorly, weakening from HUF 393 per euro in the morning to HUF 394.8 by the afternoon.
Reasons behind the forint’s weakening
Several factors are contributing to the forint’s weakening, including the anticipation of a 25-basis-point interest rate cut by the National Bank of Hungary, expected on Tuesday. The analysts provided few details in their recommendation, merely citing Hungary’s deteriorating macroeconomic environment.
Morgan Stanley isn’t the only bank voicing concerns over the forint—Barclays and Citigroup have issued similarly bleak outlooks for the currency recently, Economx writes. In the short term, Morgan Stanley sees little chance of the European Union releasing Hungary’s frozen funds, and they also flagged uncertainties surrounding the next elections. However, these points aren’t particularly convincing or new, adding little to the overall analysis.
Public spending increase before the 2026 elections?
The report also highlighted that the forint has been under pressure since early September, following rumours that the Hungarian government plans to relax its fiscal discipline in the 18 months leading up to the 2026 parliamentary elections by increasing public spending. Finance Minister Mihály Varga, however, has dismissed these claims as unfounded: as Economx writes in another article, according to a U.S. financial news agency, the Hungarian government is planning substantial cash handouts next year, which Varga has labelled as “fake news.”
In preparation for the 2026 elections, the government is expected to prioritise spending over fiscal consolidation, Bloomberg reported. However, the administration may hold off on any major decisions until after the U.S. presidential election in November, as well as the year-end credit rating review, where Hungary currently sits at the lowest investment-grade level.
The report suggested that the pre-election spending plans could resemble the strategy from 2022. Back then, tax rebates to families with children significantly fueled inflation, leading to one of the highest inflation rates in the European Union, triggering a recession and contributing to the ongoing cost-of-living crisis in Hungary. According to Index, Prime Minister Viktor Orbán supports the spending approach, believing it will secure another electoral victory, just as it did in 2022.
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Featured image: depositphotos.com
Loosening the purse strings before any elections has been our Politicians Modus Operandi since they came into power.
Shower any potential voters with some cash and ready for another round!
Besides. As our Politicians have said – the People will be stunned by next year´s economic growth, generated by their brilliant negotiations with people far, away and/or exotic. Morgan Stanley, Barclays, Bloomberg, Citigroup. What do they know?
https://www.youtube.com/watch?v=6PtdpI-D6mM
TLDR – Tomorrow, Tomorrow, I love you, Tomorrow – you´re always a day away!
The ability to SUSTAIN it-self from the on-going COLLAPSING trend that is factually, the Hungarian Financial & Economic “landscape” – through over 12 plus years of the IN-CORRECT policies “signed off” by the Finance Minister – Mihaly Varga and seconded by the Prime Minister – Victor Mihaly. Orban and his Fidesz Government of Hungary – we “live in” – the cataclysmic MESS of their CREATION.
What country’s from the West would want to INVEST in HIGH Risk – Hungary ???
WHAT country’s from the West, as the DICTATORSHIP regime of the Orban – Fidesz Government – builds on its Relationships and Partnerships with Communist – Russia and China, what company’s from the WEST – may “pull the pin” and leave Hungary ???
Those who THINK growth in the WORTH – in the CAPITAL Worth of Hungary is going to be IGNITED / Bolstered, built upon – be a constant regular facility – into the CRUMBLING collapsing Hungarian economy – way of life – standards of life – by Russian and Chinese INVESTMENT(s) – for ALL the day to day NEEDS of LIFE for Hungarians.
Hungarians who THINK this way – better seek a Brain Surgeon, for a “transplant” requirement.
Orban – the Debt he and Mihaly Varga – Finance Minister have BUILT on – placed on the shoulders of the people – the tax payers of Hungary – Heinous.
DEBT – Orban /Varga Debt – monies owed to China & Russia, at not “friendly” interest rate “struck” with clauses of in the event – such & such HAPPENS – being default from the original contract(s) – comes back to the SCREWING of the citizens of Hungary that over 15 plus years in Government, the Fidesz Government of Hungary have PRACTICED – carried OUT and upon the citizens of Hungary.
WHAT after 15 plus years have Orban – Mihaly Varga as Finance Minister – what have they DELIVERED us as a country ???
Answer – a CATASTROPHE.
REMEMBER : the DEBT of Hungary – again the TAX payers Debt to the European Union through FINES caused by Non-Compliance of the Orban – Fidesz Government to conduct it-self as a country in Membership to the Laws of the European Union and being DEMOCRATIC.
The European Union Debt – a “compounding” Debt that daily default interest charges on Hungary – PERILOUS.
Sustainability – any form of STABLIZATION – Financially & Economically of Hungary – PARADOXICAL.
Hungarians – solidarity – ORDERLY.
Don’t RAISE our VOICES – STRENGTHEN them.
Fidesz apparently can buy votes in the countryside with bags of potatoes.