Forint Goes Down, More Interest Rate Hikes Expected

The Hungarian forint fell today even though the nation’s central bank increased interest rates, prompting the speculation that more rate hikes will be performed in the future.

The Magyar Nemzeti Bank (the central bank of Hungary) boosted its two-week deposit rate from 6 percent to 6.5 percent yesterday. Bank’s President Andras Simor said that he’s ready to increase the lending rates further, even though they are already the highest in the European Union. The forint fell to the lowest level this month against the euro and it’s the worst performer against the shared European currency in the world. The downgrade of Hungary’s credit rating to junk by Moody’s ensures it’ll be hard for the forint to gain.

USD/HUF rose from 232.07 to 232.6800 today as of 12:48 GMT, while earlier it reached the daily high of 235.5700. EUR/HUF climbed from 309.3300 to 309.9250 and the intraday maximum was 312.8550.

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