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Should we expect a 380 or 425 HUF/EUR exchange rate in 2023? Here are the prognoses
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ING Bank shared an analysis comparing the exchange rate changes of the Central Eastern European currencies (Poland, Czechia, Hungary, Romania). They compared what factors played a role in the exchange rate change of the different currencies, and found that global and regional ones were not the most decisive ones, especially in the case of the forint. That means the Hungarian national currency may have a bright next year, but there are some prerequisites the government needs to fulfil to reach a better exchange rate. You may find the details below.
In their analysis, ING Bank argues that multiple external factors affected regional currencies. These include the strengthening of the USD harming all emerging currencies. Furthermore, because of the Russian-Ukrainian war, investors became more cautious in the region. Finally, increasing interest rates also had a disadvantageous effect on countries having high state debt like Hungary.
However, the Hungarian forint lost its value even against its regional competitors like the Polish zloty, the Czech koruna and the Romanian lei. When compared to the Polish national currency, the depreciation of the Hungarian currency reached 10 percent. That means something local weakened the forint, portfolio.hu wrote.
From an ING chart showing the value change of the domestic currencies against the USD between November 2018 and November 2022, it is clear that the regional currencies moved together until April-May 2022, when the forint broke away from the others.
ING argues that in the short term, global factors can have a devastating effect on domestic currencies. However, Poland, Czechia and Romania managed to grow again a couple of months after the invasion began. Meanwhile, the forint’s recovery was slower and weaker. That is because in a midterm, the fundamental and vulnerability differences matter.
Repetitive – widely asked throughout Media and “other” sectors of the Financial & Economic componentry of Hungary, in these “crushing” and “evaporating” times, the devaluation of the total WORTH of Hungary – that the Forint currency – plays a major role, in accessing or defining, the performance of a country’s Economic & Financial performance – current, short & mid-term and into the long-term FUTURE.
Nothing in Hungary through the in-ability of its Government to Stabilise – its WORSENING economy – is going to get CHEAPER.
Sustainability – of any componentry of the Hungarian Economy is nigh an IMPOSSIBLE task, purely through the cataclysmic weakness – in the entire Hungarian financial and economic outlook.
Therefor the Forint, will continue to be PRESSURIZED by all other Major currencies and be De-valued.