After a sharp fall, the Hungarian forint faces a slow recovery next year
© Reuters. FILE PHOTO: Hungarian forints and euro banknotes are seen in this photo illustration taken in Budapest February 6, 2014. REUTERS/Bernadett Szabo
By Jason Hovet
PRAGUE (Reuters) – The Hungarian forint, battered to near-record highs in late May, has the chance to recoup much of its losses and gain more than 7% next year, a Reuters currency survey showed on Thursday. from central Europe.
The forint has fallen sharply, losing more than 7% since the end of March alone, as concerns over disputes within the European Union freeze stimulus funds, slow monetary policy tightening and now windfall taxes targeting banks and other businesses are rattling investors.
In the poll, analysts expect the forint to remain under pressure in the coming months, especially as the global mood deteriorates, before a space for gains opens up as concerns ease. .
“As the dust settles on fiscal and monetary measures, we could see some moderate strengthening in the forint, but as long as the mood for global risk is rather cloudy, it’s really hard to see a move towards the levels of before the war,” Peter Virovacz at ING said.
“However, looking over 12 months, we could see a significant improvement in risk sentiment accompanied by a positive real interest rate environment, which will create significant tailwinds for HUF to strengthen.”
The poll’s median forecast saw the forint at 370 to the euro, up 7.4% from Tuesday’s closing levels, as the currency was just off an all-time low of 400.
The gain would largely erase its slide since March, but would still keep the forint lower than the levels around 350 seen before Russia’s February invasion of Ukraine rocked markets.
Elsewhere in the poll, the Polish zloty could also gain over the next 12 months, with the median forecast putting it at 4.50 to the euro, up 1.9%.
The Czech koruna is expected to weaken this year towards the 25 per euro level before rebounding and landing little changed in a year at 24.715.
The krone came under selling pressure last month after news of a change at the central bank could signal an end to the rapid policy tightening seen in recent months.
Policymakers in the region have raised interest rates since 2021 to tackle inflation, which has surged.
The Romanian leu was the only currency in the poll that saw a decline over the following year, similar to previous polls. The leu could lose about 1% to 4.99 per euro, according to forecasts.
(For more stories from the June Reuters Forex Polls:)