The Hungarian forint hit its historic low against the euro today!
This week, the Hungarian forint hit its lowest level ever. On Monday, 1 EUR was worth 372.21 HUF.
After hitting two historic lows against the euro last November, we did not expect the hungarian forint to bottom soon.
Following the Russian-Ukrainian war, the new all-time low for the Hungarian currency was reached today.
As a Hungarian news portal hvg reports, the Hungarian forint began to fall last Thursday, minutes after the Russian attack. Thursday, the value of the forint depreciated by 10 points in one day, reaching the level of 370 at the end of the day. Over the weekend, a slight improvement could be observed. Investors calmed down a bit and the Hungarian currency started at 367 on Monday morning.
During the day, however, it quickly began to decline, and as soon as European stock markets opened,
The Hungarian forint reached its lowest historical level: 1 EUR was worth 372.21 HUF.
According to Wallet, the weakening is not due to forint-specific factors.
The main reason for the weakening of the Hungarian currency is the Russian-Ukrainian war.
The conflict has sparked general risk aversion in the market, with investors seeking to dump even slightly risky assets. This affects all emerging currencies, including the forint, while currencies considered safe, such as the dollar, the Japanese yen and the Swiss franc, are strengthening.
Debuff is difficult to counter. Even if the Central Bank of Hungary cannot influence international sentiment, it has the means to mitigate these effects. One option is intervention in the forex market, but it is debatable how successful this can be in a situation like the current one.
Another practical option for the central bank is to raise interest rates. Last week, as in January, the policy rate was raised by 50 basis points and the one-week policy rate by 30 basis points. Based on communication so far, the next tightening is not expected before the end of March, but the MNB has always reserved the right to flexibly raise the one-week rate in response to volatility. of the market. The question is whether they intend to react to the current market situation.
Source: hvg.hu, portfolio.hu