The Hungarian forint has seen its worst year in 2022
The exchange rate of the Hungarian forint has reached its lowest level ever 14 times against the euro and 26 times against the dollar in 2022. The forint was also by far the worst performer against the currencies of its neighbours. It lost 9 percent of its value against the euro and 16 percent against the dollar.
According to Bank360’s expert, the huge depreciation of the forint is mostly due to uncertainties around EU subsidies. Levente Tóth believes that the arrival of EU funds could stabilise the exchange rate, rtl.hu reports.
Extremely high fuel prices
A litre of 95 petrol costs HUF 615. A litre of diesel costs HUF 685 at a cheap petrol station. At another, 95 petrol costs HUF 632 a litre and diesel over HUF 715. Last autumn, prices averaged around HUF 500. The data on holtankoljak.hu shows that the government kept the prices at HUF 480 until April, after which company cars were no longer eligible for discounts.
Hungarian petrol prices then started to move in line with the price of Brent crude oil per barrel, rtl.hu writes. But while oil prices returned to their levels at the beginning of the year, fuel at Hungarian petrol stations remained much more expensive. “Unfortunately, we do not expect fuel prices around HUF 500 in the coming months,”Eszter Bujdos, the managing director of holtankoljak.hu, told rtl.hu.
Negative records like never before
The forint has hit a historic low against the dollar 26 times this year. In the first week of March, for example, it did so four times! On 6 July, the dollar broke through the HUF 400 barrier. The last, previously unimaginable, low was on 13 October, when a dollar was worth HUF 450. The forint has fallen 14 times this year against the euro to its lowest level ever. The exchange rate almost reached the HUF 400 mark on 7 March and crossed it on 13 June. And like the dollar, the euro reached its highest level ever on 13 October, at HUF 434.
The forint is the worst performer in the region
“It is clear that the way in which the central bank reacts by raising interest rates has always played a role in the fluctuation of the forint. On the other hand, it is also evident that the forint has coped much worse with inflation and the war situation than, for example, the zloty or the Czech koruna,” said Levente Tóth, Communications Director at Bank360.
While the forint lost more than 9 percent of its value against the euro, the Polish zloty fell by just one and a half percent. What is more, the Czech koruna and the Romanian leu strengthened. Bank360’s expert said that the uncertainties surrounding EU subsidies were the main reason for the forint’s sharp depreciation. Against the dollar, all the currencies of the surrounding countries lost against the dollar, but the forint fell by far the most: by more than 16 percent.
“If euro support starts to arrive in Hungary, it will certainly have a positive impact on the forint,” Tóth said, adding that this is still unlikely to lead to a significant strengthening of the forint.
Read alsoHungary leads EU in overall price increases
Source: rtl.hu
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