EUR/HUF: EU relations and monetary policy to remain fundamental negative factors for the Forint – Commerzbank
|Economists at Commerzbank analyze Hungarian Forint (HUF) outlook.
Forint to regain some ground by the end of the year
We forecast the Forint to regain some ground by the end of the year because inflation is likely to moderate faster than the pace at which MNB will cut rates, and the real interest rate will therefore become less negative – in this window, we see EUR/HUF in the 365 range.
But, we forecast a weaker forint subsequently in 2024 because: Hungary is more inflation-prone than Poland or the Czech Republic, which will depress Hungary’s real interest rate once again when inflation proves stubborn in 2024. The situation surrounding Hungary’s disputes with the European Commission on EU funds continues to be precarious. The latest government guidance suggests that such conditionalities are not about to be met soon. High risks prevail in this regard.
Source: Commerzbank Research
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