When discussing the strength of the Hungarian Forint, it is usually compared to EUR and USD as the benchmark currencies. Over the last month, HUF has been gradually getting stronger, with just a relatively small hitch in exchange rates in the middle of March.
EUR exchange rates
EUR is currently around HUF 380, as has been since the middle of February 2023. The exchange rate peaked in October 2022 around HUF 435, and later early December at HUF 425. It has been steadily decreasing ever since, meaning that it is below HUF 400 since January 2023, and below HUF 380 since mid-February. There was only one other smaller peak in the middle of March, strongly related to the bankruptcy of SVB and the crisis at Credit Suisse. However, now the rate is back around HUF 380.
USD exchange rates
The USD/HUF exchange rate followed a similar curve to that of the EUR. It also peaked around HUF 450 in October 2022, but it has shown a steady decrease since then. Here too, there was a peak in the middle of March around HUF 370, but now the exchange rate is back to around HUF 350, which is the same as the exchange rate in April 2022.
Inflation and finances
Inflation in Hungary is still high, around 20%, but the Hungarian National Bank (MNB) expects that we are over the peak, and by the end of the year inflation will go back to around 5%. At the same time, the increase of the prices of various foodstuff is expected to slow down sooner, as it was a lot higher than that of other products throughout 2022. Since there is no sign of the price caps being abolished in the near future, that was not included in the forecast. At the same time, the spokesperson indicated that such an event would most probably have positive effects on inflation in general.
To keep inflation at bay, the MNB keeps implementing measures to strengthen monetary transmission. The basic interest rate remains high for the coming months. At the same time, MNB has introduced a new tender for April to support the liquidity of banks at the end of Q1 2023.
Stay on top of finances at your Hungarian company
Foreign exchange rates are most important for your Hungarian business if your trade internationally. However, they can impact your business indirectly too, so it is worth keeping an eye on them at all times, and take advantage of them whenever possible. A good accountant such as those in the team of Helpers Finance can support your Hungarian operation with precise data on your finances and information about what to watch out for when exchanging currencies.
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