Forint Plunges to Weakest Level Since Election Amid Rising Oil Prices
Hungary's forint has suffered a sharp decline in value, briefly falling below HUF 370 to the euro on Wednesday morning. This marks its weakest level since Hungary's parliamentary election in April.
The forint had been trading at around HUF 365 to the euro on Tuesday morning but lost further ground over the following day. The EUR/HUF exchange rate briefly climbed above 370 before settling just below that level.
The weakening of the forint is attributed to a combination of international developments and rising energy prices, according to ERSTE market analysts. They point out that the strengthening US dollar and rising American bond yields have reduced demand for riskier emerging-market currencies like the forint.
Rising oil prices are another concern for Hungary, which relies heavily on energy imports. Brent crude has climbed by almost 5% and moved above USD 95 a barrel amid renewed tensions in the Middle East.