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Analysts: Russia-Ukraine conflict hurts forint

Analysts attribute fluctuations in the rate of the Hungarian currency to developments in the conflict between Russia and Ukraine.

The forint weakened on Friday morning, nearly reaching 316.5 against the euro before starting to firm. Further strengthening of the euro was hindered by low annual inflation and high unemployment in the euro area, as well as a “technical barrier” against the forint at the 316-317 level, Quaestor analyst Péter Mester told MTI, adding that he expected that tendency to continue next week.

The forint fell 1% on Thursday afternoon to trade at levels seen three weeks ago. Mester gave warning that the forint could further weaken in the next 6-12 months, in wake of a “war of sanctions” between Russia and countries of the West. A major strengthening of the forint could only be expected if the situation in eastern Ukraine should ease considerably, and the US Federal Reserve postponed an expected hike of its base rate, he added.