Forint expected to weaken further

A senior financial analyst predicts that the Forint decline against the Euro will continue as a result of low interest rates. He suggests that both low rates and a weaker Forint are beneficial for Hungarian businesses.

On G7, Zoltán Török, chief financial analyst of Raiffeisen thinks that the Hungarian government wants to keep interest rates down in order to boost the economy, even if this means that the Forint weakens. Despite the Orbán government’s balanced budget and low deficit over the past 8 years, the Forint has weakened 32 per cent against the Euro, much more than the Polish or the Czech currency, Török notes. A weaker Forint also helps Hungarian firms and improves the National Bank’s balance sheet. Török concludes by predicting that the Forint will weaken to 400 against the Euro in a couple of years.

Tags: economy, Forint, interest rate, National Bank