The Hungarian forint strengthened to levels not seen in years on Wednesday morning, with the euro falling to HUF 380.2. It is the currency’s strongest point since December 2023. The forint also strengthened against the American dollar, reaching HUF 326.4—its best level since February 2022.
The forint has been on a steady upward trend for weeks, repeatedly hitting 18-month highs in November. Analysts attribute the appreciation partly to international developments—such as the weakening of the US dollar—but primarily to the Hungarian Central Bank’s (MNB) firm communication. The MNB has repeatedly underlined the importance of the forint’s exchange rate and indicated that it takes this into account when deciding on interest rates. The Monetary Council has kept the base rate unchanged at 6.5 per cent for a full year.
‘On 10 November, the first weekday after the Orbán–Trump agreement, the forint jumped to an 18-month high in immediate reaction to the announcement’
The strong performance of the Hungarian currency is also linked to the currency-swap deal agreed between Prime Minister Viktor Orbán and US President Donald Trump in November. A currency-swap arrangement is a financial instrument often used when one of the participating countries faces a severe economic crisis or speculative attack. In such cases, the two parties temporarily exchange their currencies at a predetermined rate and amount, thereby alleviating shortages of foreign currency. This mechanism helps prevent default on foreign currency-denominated debt, bolsters central-bank reserves and increases resilience against sudden exchange-rate volatility.
In many cases, a swap line is never actually drawn upon; its mere existence can stabilize a currency by deterring speculative investors betting on its collapse. In this way, the countries involved create a protective shield around one another to prevent foreign-currency shortages—hence the term financial shield. On 10 November, the first weekday after the Orbán–Trump agreement, the forint jumped to an 18-month high in immediate reaction to the announcement.
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