Hungarian forint at multi‑year high against euro and dollar: could it gain another 10% in April?

The forint has strengthened markedly, and even the news that yesterday Governor Mihály Varga announced a cut in the central bank’s base rate after 1.5 years did little to dent the trend. Pro‑Fidesz papers attribute the move to Trump and a forthcoming peace, while other experts point to yesterday’s Medián poll favouring Tisza. Of course, a combination of these factors could be behind the forint’s strength.

The forint keeps marching higher

Whatever the overall picture, the forint is in superb shape against the euro, the American dollar, and regional currencies. Világgazdaság notes it is at a two‑year high versus the Czech koruna and the Polish zloty, a four‑year high against the Romanian leu, and a four‑year high against the dollar; against the euro, it sits at a two‑and‑a‑half‑year peak.

According to Világgazdaság, the forint’s astonishing weakness in 2022 was born of the war in Ukraine and, as they see it, the subsequent energy crisis. As a result, the drivers of the forint’s strength are:

• the election of Trump and Washington’s commitment to Ukraine peace;
• the strengthened credibility of the central bank under Mihály Varga, making yesterday’s base rate cut beneficial for the economy and financial markets.

Will the forint strengthen or weaken if Tisza wins?

Government‑close Világgazdaság argues that a Tisza victory would not help the forint at all; on the contrary, it might hurt, given that an inexperienced coalition would lead the country and would not be expected to bolster the forint via higher government bonuses.

Portfolio agrees that Varga’s cautious, data‑driven rate‑cutting approach is supportive of the Hungarian currency, but attributes a far more significant positive role to the possible accession of Tisza to government. On the one hand, Tisza could bring home up to EUR 20 billion (about HUF 7,500 billion) in EU funding, and on the other, the party has repeatedly signalled its intention to introduce the euro if it comes to power, the paper notes. Orbán stated multiple times that he would not like to introduce the euro in Hungary.