Hungary’s forint among the world’s best currencies: what does the future hold?

The leading analyst of CIB Bank, Mariann Trippon, gave a precise prediction of the forint’s future. The Hungarian currency has been struggling in the last few months, partly because of international and domestic reasons. Will we have to pay HUF 400 for 1 EUR in the second half of 2023 or just 360? That is the big question she answered, and her result is quite astonishing and logical at the same time.

According to G7.hu, the forint may take three possible levels: 400, 385, and 365 per euro. To predict where the forint will be months later, we have to know what factors affect its currency exchange rate. In 2022, the forint was one of the worst-performing currencies in the world. Meanwhile, in H1 2023, it was one of the best-performing ones. How is that possible?

Read also:

• Hungarian forint among the world’s worst-performing currencies – Read more HERE
• Hungary’s forint became one of the best currencies in the world!

Firstly, the Hungarian national bank introduced a high base interest rate, one of the world’s highest (18%). Furthermore, they announced they would not reduce that as long as inflation is not down and the forint is not protected. As a result, many investors borrowed money in EUR, USD, GBP, etc and invested in forint, increasing its value. The strategy worked but balancing it costs a lot for the Hungarian taxpayers (because they pay the high interest rates, which makes the business profitable for the investors).