Forint hits new low: Weakest since 2022 amid economic struggles

The Hungarian forint has plunged to its weakest rate against the euro since December 2022, sparking concern among economists. Experts attribute this downturn largely to international factors, including a volatile geopolitical environment, but domestic policies also play a part. The future of the forint may depend heavily on the release of EU funds, though there remains uncertainty about their arrival.

Sharp decline in the forint

The week started poorly for the forint, with the currency hitting a four-month low against the dollar and sliding to HUF 404 per euro by the weekend—the weakest level in nearly two years. Csaba Szajlai, an analyst at Világgazdaság, pointed out in an interview with ATV News that the upcoming U.S. presidential election could influence the euro-forint exchange rate, with a possible Donald Trump victory expected to weaken the euro, while a win by another candidate might stabilise it.

Tensions between Brussels and Hungary’s budget

Economist Csaba Lentner sees Hungary’s ongoing financial struggles with the EU as a primary factor in the forint’s decline, along with the Hungarian National Bank’s current losses totalling around HUF 3,000 billion (EUR 7.40 billion). Lentner believes that Hungary’s absence of EU funding is adding pressure to the currency, stating that the weak Hungarian currency could test the resilience of the economy, especially as the 2026 elections approach. Given the current economic climate, he suggests that the forint could fall as low as HUF 430 per euro.

Trust issues at play

Opposition MP Zoltán Vajda of the MSZP party argues that the Hungarian currency’s persistent decline has deep roots, noting that since 2010, the currency has lost nearly 50% of its value against the euro. According to Vajda, government actions have eroded investor confidence, worsening the currency’s situation. He added that if Hungary had already adopted the euro, people would no longer need to worry about the forint’s day-to-day volatility.

While both global events and government financial policy are weighing on the currency, experts caution that only short-term measures might bring any stabilisation. In the long term, however, a more substantial recovery for the Hungarian currency remains uncertain.

UPDATE: EUR/HUF exchange rate reaches 405

The forint fell to a new low on the second day of the week, hitting 405.231 on Tuesday at around noon, Economx reported. It then went back below 405 then reached that level again after 2 PM.

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Featured image: depositphotos.com

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