The Hungarian Forint has declined for a fourth day in a row and weakened to its lowest level in nine months against the Euro after the Hungarian Prime Minister Viktor Orban revealed plans to convert company’s foreign-currency loans and called for lower interest rates.
Orban’s call for lower interest rates came after he said that Hungary needs lower interest rates to boost lending in the country and to reduce the burden of foreign-currency loans and free up exchange rate policy. Investors are speculating that the government will probably want to deliberately weaken the Forint in an effort to boost exports.
So far today the Forint has fallen by 0.4% to 307.21 per Euro, its weakest intra-day level since June 1st and is close to its lowest level since January 2012.
Inflation in the country has slowed by a faster rate than analysts estimated declining to seven-year low of 2.8%.
Investors have been frightened away from the currency in recent months due to Orban’s controversial polices. They also don’t like the row between Budapest and the European Union over the constitution; nor György Matolcsy, the new central bank governor; nor plans to convert small companies’ FX loans into Forint, using the central bank’s reserves. Expect further pressure on the currency.
The Hungarian Central Bank is expected to lower interested rates at its next policy meeting on the 23rd of March after Matolcsy made no secret of his preference for lower interest rates and a cheaper forint in a bid to raise Hungary out of stagnation.
Current HUF Exchange Rates
The Hungarian Forint to Euro exchange rate is currently trading at 0.00326
The Hungarian Forint to US Dollar exchange rate is currently trading at 0.00424
The Hungarian Forint to Pound Sterling exchange rate is currently trading at 0.00284
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