On the other hand, the Hungarian PM rarely mentions Trump’s anti-China policies, which could lead to clashes between Budapest and Washington. The Hungarian government is actively working to establish, maintain, and expand its relations with China in various areas, including education, the economy, railway upgrades, and even financing Hungary’s growing debt.
Viktor Orbán and Chinese President Xi Jinping. Photo: FB/Orbán
Conversely, a Republican victory in both Congress and the White House could lead to a stronger U.S. dollar, presenting new challenges for the Hungarian currency.
Can the Hungarian National Bank (MNB) stabilise the forint?
The Hungarian National Bank has pledged to keep the base interest rate steady for at least the next three months in an effort to support the Hungarian currency. Portfolio.hu suggests that further intervention from the MNB may only occur if the forint weakens uncontrollably. Some analysts predict the forint could strengthen to around 400/EUR by year-end, but a sustained softening is anticipated for 2025, with the exchange rate likely remaining above this threshold.
György Matolcsy, the governor of the Hungarian National Bank. His term will end in early-2025. Photo: FB/MNB
The forint’s decline is partly due to Hungary’s sluggish GDP growth and ongoing delays in receiving EU funds. Poland’s zloty, though also under pressure, has held steadier due to Poland’s stronger growth and EU financial support.
Will S&P retain Hungary’s investment-grade status?
According to Portfolio.hu, S&P is likely to maintain Hungary’s investment-grade rating with a stable outlook, following a similar move by Japan’s R&I on 22 October.
The forint traded at 404.22 to the euro around 10:00 on Friday morning, weakening from 402.78 late on Thursday. The current exchange rate stands at 403.75. The forint also eased to 373.50 from 372.92 against the dollar and slipped to 431.24 from 430.31 against the Swiss franc.
In June, all three major credit rating agencies—Fitch, Moody’s, and Scope Ratings—maintained Hungary’s position in the investment grade category.
Photo: Daily News Hungary
UPDATE: Euro above 404
The forint traded at 404.08 to the euro around 5:30 in the evening on Friday, slipping from 402.78 late Thursday. The forint eased to 373.44 from 372.92 against the dollar. It weakened to 431.12 from 430.31 to the Swiss franc.
UPDATE 2: S&P decision
S+P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on Hungary in a scheduled review on Friday. The outlook is stable.
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Publish date : 2024-10-25 21:27:00
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