Why the Hungarian Forint continues to weaken

Hungarian forints have been weakening recently. Even if it is enhanced, it is still not as strong as it should be. Read our article to find out why the Hungarian currency is in its place today.

It is impossible for the forint to be so weak

“There is no reason for the euro to be 400 forints,” said former central bank governor György Surányi. He is György Matolcy (Governor of the National Bank of Hungary, MNB) and Márton Nagy (Minister of Economy). According to Surányi, this shows that neither the government nor the central bank is credible from a market perspective.

Former central bank governor György Surányi shared his thoughts on the weakening of the forint. Interview with Privát banká June 23rd. Surányi was the two heads of Magyar Nemzeti Bank. He served as Secretary of State from 1990 to 1991 and President from 1995 to 2001.

The weakest in the area

It’s a sad fact that the forint exchange rate has been around 400 levels for several days. Forint hasn’t worked well in the last decade and has declined by about 50%, making it one of the worst performing in the region. In February alone, it was weaker by 12-13%, well below the local currencies. Report..

Why does the forint continue to weaken?

According to the Central Statistics Office (KSH), domestic inflation is 10.7%. According to Surányi, about half of inflation is the result of externalities. But the other half is due to internal effects.

“The head of the MNB said that credit outflows, loose fiscal policy, and real wage increases do not affect inflation. So what could have an inflationary effect?” Asked Surányi. increase.

“Whenever either the minister or the governor of the central bank speaks, the forints always react by collapsing. They need to think about their credibility.”

He adds.

“I don’t think we’re lucky,” said Marlton Nagy, Minister of Economic Development, who said the forint exchange rate was exactly what it should be. After that, the exchange rate fell by five forint. In a typical economy, neither the government nor the central bank cares about the exchange rate. “

Forint Daily News Hungary
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