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Forint Hits New Historic Low against the Euro

Júlia Tar 2021.11.22.

The weakening of the forint began last week and has continued on Monday, with the Hungarian currency quickly falling to a new historic low against the euro, Portfolio reports.

On Monday morning at around 10:30, the forint weakened to 370.24 against the euro, a new historic low.

This is already roughly half a percent weaker than on Friday evening, partly due to the strengthening dollar, Portfolio adds, as risk aversion in emerging markets can be seen.

As of Wednesday last week, the central bank’s base rate was set at 2.1 percent, a 30 basis point increase. The market was expecting a higher increase, according to Telex.

Rate-setters Point to Persistence of Upside Risks Surrounding Inflation Outlook
Rate-setters Point to Persistence of Upside Risks Surrounding Inflation Outlook

Therefore, the tightening cycle that started in July will be continued on a monthly basis, though at a slower pace.Continue reading

Besides the uncertainty surrounding the Hungarian central bank’s monetary policy, international sentiments are working against the forint, with risk aversion towards emerging markets has intensified in recent days, Portfolio notes.

Featured image via Pixabay