Hungarian forint continues to weaken – will it fall victim to the war and crisis?

The Hungarian forint has been up and down in the past weeks, but mostly down. One company has already been wrecked by the economic crisis.

As Forbes put it, the forint is tired. After the victory of FIDESZ, it has been jumping up and down, but by now, it is stuck in the same place. The forint strengthened slightly against the euro on Friday morning. Although it has already worked its way down from Thursday’s 380, it seems that the exchange rate has settled around 378.55. It is still not a good rate at all, given that prior to the parliamentary election, the price of one euro was HUF 366-367.

Rule-of-law mechanism and press conference

There are two main reasons for the continuous bounce of the forint this week: the launch of the rule-of-law conditionality mechanism and Orbán’s press conference. As we wrote earlier this week, Ursula von der Leyen, President of the European Commission, has formally announced that the

European Commission is activating the rule-of-law conditionality mechanism against Hungary.

During a press conference earlier this week, PM Orbán said that when talking to Russian president Putin on the phone, he asked for a ceasefire between Russia and Ukraine. What is more, he also said during the conference that if Russia wants Hungary to pay for natural gas in roubles, that would be no problem for the country.

• Read also: EC president’s threat: Hungary breaches sanctions if it pays for gas in rubles

However, Ursula von der Leyen was not so happy about it. She said that it indeed would be a problem and that if Hungary does proceed to pay Russia in roubles, that would be a breach of EU sanctions against Russia.