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Forint Continues Downfall, Weakening to Yet Another Historic Low

Péter Cseresnyés 2021.11.23.

After breaking an all-time low on Monday, the Hungarian currency continued its downfall on Tuesday, reaching a new historic low against the Euro at 372.01. 

Besides several domestic factors such as the high level of government expenditures in the run-up to the elections, international factors are also working against the forint exchange rate.

According to Portfolio‘s overview, the strengthening of the dollar may be among them, as well as the fact that in recent weeks, the CEE region has become a prime target for investors due to high inflation and worsening pandemic data.

The Orbán-led government’s increasingly serious disputes with the European Commission, threatening the potential witholding of Hungary’s EU funds, could also be playing a role in the weakening of the currency.

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Varga said the jump in energy prices, raw materials and transport costs, as well as the re-pricing amid the post-pandemic economy -- services in particular -- were largely behind the 6.5 percent headline inflation.Continue reading

Featured photo illustration by Attila Kovács/MTI