Could anything save the Hungarian forint?
Monday, June 13, the forint broke all records: the euro rose above 400 forints, even reached 402. Can we still hope that the exchange rate will return to normal one day? What could help the Hungarian currency? Read our article to find out.
According privatbankar.hu, it was known that the euro would sooner or later reach the level of 400. At the end of February, the euro was at 370 forints. Many think that if nothing happens to save the forint, we could reach 450 in less than 4 months.
The weakest link
More than three months ago, the Hungarian currency was toppled by the fact that the Russian-Ukrainian war made the forint the weakest link for investors in the Central and Eastern European region, and they began to speculate against him, writes privatbankar.hu.
For a brief period in April, the euro was worth 366 forints, leading many to false hope. People thought they didn’t have to worry about the forint anymore, that everything was fine.
Then, at the end of April, the European Commission launched the rule of law procedure against Hungary. This was a sure sign of the deterioration of the forint as it threatened to deprive the Hungarian economy of EU funds.
What can be done for the forint?
It is the government that can do the most to prevent the forint from weakening further. First and foremost, by taking steps to stop the EU’s rule of law process, which would allow money from the recovery fund to start flowing into Hungary.
Of course, the abolition of price freezes and the reduction of overhead reductions, and the abolition of special taxes or their reduction can also convince the outside world and therefore investors that it is worth keeping their money in our countries – these exchanges can strengthen the forint. But the biggest impact would come from an agreement with the EU.
Prospects are not too good
However, penzbankar.hu now sees little chance that members of government will even lift a finger to improve matters. At least that is the conclusion to be drawn from the repeated statement by Márton Nagy, the Minister of Economic Development, that there is nothing wrong with the forint exchange rate, it is exactly where it should be.
Source: privatbankar.hu, dailynewshungary.com