Hungarian Forint: Another Negative Record vs. the Euro

The common European currency, the Euro crossed the HUF 409 mark on Tuesday afternoon, setting a new record. At the same time, the Euro also reached a new low against the US currency, which was at HUF 398 forints to the dollar at one point, the popular news site telex.hu reports.

On June 13, the forint crossed the HUF 400 / Euro psychological barrier for the first time on a sustained basis, and later failed to recover despite the national bank's huge interest rate hike. This time, a record of HUF 408 / Euro has been broken. The following factors are behind the depreciation of the Hungarian currency:

• The special taxes imposed on certain sectors of the economy do not reflect well on Hungary in the eyes of foreign investors. In general, it is not worth bringing money into a country where you never know what extra taxes will be imposed on you overnight.

• At the end of April, a rule of law procedure was opened against Hungary, which could jeopardize the disbursement of some EU funds.

• At 12.2%, core inflation is one of the highest in Europe.

• Price freezes, which distort competition, have been extended.