Are you sure?

Government attributes weakening forint to speculation

The Hungarian forint (HUF) depreciated to a record low of 328.29 against the euro on Wednesday. Government spokesman Zoltán Kovács speculated about the reasons and Parliamentʼs Budget Committee has summoned the governor of the National Bank of Hungary (MNB) to a hearing next week on the issue.

Spokesman Zoltán Kovács

Ten years ago, Prime Minister Viktor Orbán, then speaking as an opposition leader, said that a crisis of confidence in Ferenc Gyurcsány, then the countryʼs premier, caused the weakening of the forint and that he should resign in order to end the forint crisis, online news portal index.hu recalled. The report noted that at that time, the forint stood at 274 against the euro.

During his weekly press conference today, government spokesman Zoltán Kovács said the situation ten years ago cannot be compared to the current one, as there is "a great contrast" between the two. Macroeconomic figures are in order now and economic output does not explain the depreciation of the forint, he argued.

"We do not exclude that speculative processes are behind this," said Kovács, without giving details, index.hu reported.

MNB Governor György Matolcsy has been summoned to appear before Parliamentʼs Budget Committee on July 4 in order to provide an explanation for the depreciation of the currency, outline its effects on the state budget, and the MNBʼs plans to contain the situation.

According to index.hu, however, it is unlikely Matolcsy will appear before the committee in person, but will send someone else, given that the hearing has been convened by a member of the opposition.