The Hungarian forint plunges: new record against the euro above 420

The forint started to weaken even before the market opened, and the weakening accelerated thereafter. The dollar is also strengthening against the euro.

The forint weakened to over 420 against the euro at 11 AM on Thursday. The exchange rate against the dollar weakened to over 435 at the same time, hvg.hu reports.

New historic lows as things stand:

• Against the euro: 420.4,
• Against the dollar: 435.15.

Unusually, the forint weakened significantly before the market opened and has continued to do so ever since. It fell from 414 against the euro to 415.8 in about an hour – the historic low was 416.7 before Thursday. Against the dollar, also in an hour, it went from 427.7 to 430.4 – the old historic low was 432.6.

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The main reason behind the price movements is certainly the strengthening of the dollar. The US currency has been strengthening since 28 September, and there have also been significant bounces against the euro just as the currencies of the region, the Hungarian forint, the Czech koruna and the Polish zloty, are breaking down.

The forint has been weakening since Tuesday, when the Hungarian National Bank (Magyar Nemzeti Bank, MNB) announced a larger-than-expected interest rate hike and the end of its rate hike cycle. The central bank will continue its monetary tightening with other instruments, focusing on liquidity tightening.

Source: hvg.hu