Weak, weaker, weakest.

Among the declining currencies in Central and Eastern Europe, Hungary's national currency, the forint, is increasingly standing out.

Despite monetary policy maneuvers by the central bank (Magyar Nemzeti Bank MNB), the forint remains under pressure.

One euro is now traded at 409 forints.

Michael Seiser

Business correspondent for Austria and Hungary based in Vienna.

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On Thursday, the central bank raised the interest rate for one-week deposits by another two percentage points to 9.75 percent, the MNB said.

It is the sharpest increase since the global financial crisis in 2008. Just over a week ago, the central bank raised its key interest rate to an unusually high level of 7.75 percent.

The forint reacted only briefly to the acceleration of the interest rate carousel with price gains, then continued to depreciate significantly to 415 forints and thus almost to the record low of 417 forints of the previous day, before recovering again.

For weeks, however, the forint has been marking new lows against the euro.

The reason for this is, on the one hand, the lack of clarity about the payment of EU funds for the country, explains the chief analyst at Erste Group, Fritz Mostböck.

These are up for grabs because Hungary is threatened with cuts in billions in payments from the EU budget following a ruling by the European Court of Justice on the so-called rule of law mechanism.

Hungary is one of the largest net recipients in the Community.

On the other hand, Mostböck points to the pressure in the state budget.

Finally, the national conservative government capped energy prices for consumers.

That is why the state has to pay the difference from public funds.

According to forecasts, the small Central European country is likely to achieve new debt of 6 percent of economic output this year and thus one of the highest deficits in the EU.

In addition, analysts repeatedly criticize the monetary policy course of the Hungarian central bank.

The central bank has been fighting against the weakness of the forint for some time.

However, she repeatedly raises doubts as to whether she intends to hold out on this course.

Commerzbank points out that at least part of the forint's weakness was caused by the devaluation of the euro.

This part is unlikely to be fully reversed by domestic monetary policy action, says FX expert Tatha Glose.

Nevertheless, a higher interest rate is a good idea at the moment.

It will have a positive effect on the forint as soon as the euro exchange rate reverses at some point.

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