It is becoming more and more certain that high interest primarily provides a strong support for our means of payment.
After the Hungarian currency went through hell last year, it is almost unbelievable, but in 2023, the forint is one of the world's best-performing currencies, Portfolio wrote. The newspaper reported that in the first quarter only the currencies of Chile and Mexico performed better than it. It is more and more certain that primarily
the high interest rate provides strong support for the HUF, as the governing rate is over 10 percent in both countries.
The paper reminded that in 2022, the forint was above 400 against the euro, and in October the exchange rate also crossed the 430 level, which unfortunately dropped the Hungarian currency to a historic low.
After that, the benchmark interest rate, which was raised with unprecedented speed by 500 basis points to 18 percent, turned the forint into a strength.
and this has continued ever since. According to the paper, the most important reason for the success is still the 18 percent benchmark interest rate, which is hard to find not only in Europe, but also in emerging markets. It is not worth speculating against the forint, which holds speculators back.
Source: Mandarin
Featured image: Infostart
