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Jul 20, 2018

Finance Minister: The Hungarian forint has recovered

The finance minister has revealed that the Hungarian forint is finding a new equilibrium level, adjusting to conditions on international markets

The finance minister has revealed that the Hungarian forint is finding a new equilibrium level, adjusting to conditions on international markets.

During an interview with Világgazdaság, Mihaly Varga noted that the national currency has recovered value.

“Naturally, one also has to be aware that that calm period during which the forint’s exchange rate [to the euro] was between 305 and 315 has come to an end: the Fed has started a tightening cycle, the ECB is rolling back its quantitative easing — as far as exchange rates are concerned, this results in a more sensitive period, when the forint also finds a new equilibrium level in response to these conditions,” Minister Varga said.

According to MTI, the minister added that there was no need to modify next year’s budget because of the weaker forint.

Higher expenditures will be matched by higher revenue from taxes on consumption because of inflation, he explained.

The 2019 budget, which lawmakers are set to approve on Tuesday, calculates with a HUF/EUR exchange rate of 311.

On Tuesday, Parliament approved a package of laws which form the basis for next year’s budget. The package that amends 42 laws was passed with 134 in favor and 58 against.