Hungarian forint exchange rate set to remain low

currency , exchange rate , Hungary , monetary policy

The coronavirus crisis has pushed the forint to levels over Ft350:€1. This corresponds to the government’s preferences, and the central bank will do just enough to keep it from falling any further. The early effects of the coronavirus pandemic in Hungary drove the country’s currency to a record low, Ft370:€1, on 18 March. The National Bank of Hungary (NBH, the central bank) responded by hiking the one-week lending rate to 1.85%, from 0.9% previously. It left its 0.9% policy rate unchanged, however. This has so far succeeded in keeping the forint at levels between Ft350 and Ft360 to the euro.