The exchange rate of the Hungarian forint collapsed. The reason is Orban’s statement on Ukraine

The exchange rate of the Hungarian forint collapsed.  The reason is Orban’s statement on Ukraine

The Hungarian forint lost 0.9% of its value and fell to 377.2 forints per euro, which became the biggest drop among developing countries’ currencies today, May 23. The fall in the value of the forint occurred after the Prime Minister of the country, Viktor Orban, said that Ukraine would not be able to defeat Russia, according to Bloomberg.

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Fall of the forint

Because of Orbán’s position, Hungary will have to wait longer until the European Commission unblocks multibillion-dollar aid to the country, which will have a negative impact on the local economy, the agency adds.

The fall of the forint was also influenced by the decision of the Hungarian Central Bank to reduce it by 1 percentage point for the first time since the beginning of the year. up to 17% discount rate.

“The rate cut will make the forint more sensitive to negative news related to both internal and external factors,” Petr Matys, senior currency analyst at In Touch Capital Markets, commented to the agency.

Hungary’s key rate of 18% attracted investors, which helped the forint to strengthen by 6% against the euro since the beginning of the year.

What Orban said

The Prime Minister of Hungary, Viktor Orbana, is convinced that Ukraine is not capable of winning the aggressive war that Russia has unleashed against it. He stated this in an interview with Bloomberg.

In response to the question, the Hungarian Prime Minister said that Hungary does not belong to the “mainstream European approach” in the context of the Russian-Ukrainian war.

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Author: Editor of the news feed Yaroslav Holoborodko Writes on the topics: Macroeconomics, stock market, cryptocurrency

Source: Ministry of Finance

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