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Forint weakens further against the Euro and Dollar

October 12th, 2022

As year-on-year inflation hits 20,1 per cent in September, and 1 Euro trades at 429 HUF, an independent financial analyst wonders how and if the decline of the Forint can be halted.

On Portfolio, Károly Beke fears that the Forint may continue its slide and hit further lows against the Euro. The economic analyst recalls that among major currencies, only the Argentinian Peso and the Turkish Lira weakened faster than the Forint in 2022. Beke notes that the Forint’s decline has continued even as energy prices, most importantly, heating gas prices started to reverse. Beke believes that the main reason for the Forint’s weakness is the Central Bank’s announcement that it will stop rate hikes at the current 13 per cent level. At this point, the Central Bank can do little to help the Forint, Beke notes, pointing out that Hungary’s foreign currency reserves are also depleted. Unless global sentiments improve significantly, the only thing that can reverse the Forint’s decline is a deal with Brussels on the suspended EU funds, Beke concludes.

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