Russian Invasion: HUF Hits New Low Against the Euro

The Hungarian currency, the forint weakened to unprecedented levels, first to 375 forints and then to 379 forints against the euro this Tuesday.

According to Lajos Török, senior analyst at Equilor, two pieces of news in particular could have played a role, Hungary's greater involvement in the conflict, supporting Ukraine's EU membership, and the contradictory news that Belarus has also entered or may enter the war with military troops, which Minsk has denied.

He is quoted by the Hungarian news site Telex as saying that the primary reason behind the record weakness of the Hungarian currency is surely the Russian-Ukrainian war, with the conflict's wake usually also depreciating the currencies of nearby smaller countries, but investors may have been thinking of the specific economic impact when they decided to sell.

The rise in energy prices, especially gas prices, but also oil prices, has also hurt the Hungarian economy, the country’s trade ratio has deteriorated, and Hungarians have to produce more export products to buy the same amount of imported energy.