23.12.202510:05:51UTC+00Forint Weakens as Minister Urges Rate Cuts

The Hungarian forint has declined to approximately 331.6 against the dollar, marking its lowest point in roughly a month, following renewed public calls from Economy Minister Márton Nagy for the central bank to implement interest rate cuts. During a recent interview, Nagy contended that the current tight monetary policies have undesirably strengthened the forint and are unwarranted as inflation rates continue to decrease. He emphasized that reducing interest rates would bolster economic growth and alleviate pressure on the national budget, aligning with the long-standing position of Prime Minister Viktor Orbán’s government. Although the central bank, led by Governor Mihály Varga, has maintained its stance against political influence and kept rates stable for more than a year, it has lately suggested that it may consider easing monetary policies in 2026 if economic conditions permit. Nagy also criticized the role of carry trades, which have temporarily elevated the forint by drawing in short-term foreign capital seeking high returns. He argued that these flows are volatile and do not signify sustained confidence in Hungary’s economic stability.