Experts: 375 HUF/EUR reachable – here is when and how
Orbán’s chief of staff, minister Gergely Gulyás, said that Hungary could get by well even without EU funds. But the markets badly need a final agreement between Hungary and the European Union opening the money taps. That scenario would mean the forint could strengthen even to the 375/EUR level by this summer. Here is what the experts told index.hu regarding the issue.
Analysts agree: forint may have a bright year
Péter Virovácz, an analyst of the ING Bank, said that the forint might strengthen to the 375/EUR level by this summer. Zoltán Török, the leading analyst of the Raiffeisen Bank, added the importance of the EU money to accomplish that plan.
Mr Török added that the EU gained a crucial tool he does not regret utilising to keep the Hungarian government under pressure, index.hu wrote. He does not see a positive change in the issue even though the Hungarian economy badly needs it since the tensions with the EU cause considerable loss in the country’s development.
If investors see an advance in the negotiations and at least an expenditure plan regarding the EU money, financial sources will come to Hungary, buying up forint. In that case, the forint may break even the 375/EUR threshold by this summer. Of course, Török highlighted multiple uncertainties in the calculation, but the trend does not seem unrealistic.
US economy might have a significant effect
In 2023, the forint’s performance was one of the best in the region. It had some historic lows in end-2022, but by now, it strengthened back into the 385-390/EUR zone. However, the Hungarian national currency remained volatile. News about a strengthening USD was enough to lose its value again and reverse the above-mentioned trend.
Mr Virovácz calculates with a gradual and trend-like forint strengthening. If the European Central Bank continues to increase interest rates while the FED ends that, the currencies of the emerging markets might gain new strength again.
But unexpectedly beneficial employment data from the USA can baulk that trend. Furthermore, Moody’s has not yet rated Hungary, and a significant downgrading would also harm the forint. However, he believes that the forint will remain under 400.
Read alsoExperts: 375 HUF/EUR reachable – here is when and how
Source: index.hu