Is 390 the current officially preferred EURHUF rate?

HUNGARY - In Brief 18 Dec 2025 by Istvan Racz

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You know, it is a pretty common disease among analysts to see reason even where there is none. So, maybe we have just fallen prey to this pandemic this time. However, there may be still a story, a sort of conscious calculation to manage the EURHUF exchange rate, behind what we have seen most lately.The story obviously starts with the MNB's current management having put increased emphasis on the forint exchange rate, as the key tool to tame inflation, without any conceptual disagreement expressed by the government. The forint appreciated on this basis, supported by the high base rate, as widely known. But then, Minister Nagy still said at a conference in early October that perhaps the MNB's otherwise correct positive real interest rate policy could be implemented with a somewhat lower nominal base rate. At that moment, EURHUF was just making attempts to cross the 390 line in pretty a good mood towards an even stronger forint.Following Mr. Nagy's comments, there was a bit of hesitation, but after a short while, the forint gathered courage again and continued marching in the southern direction, as there was no continuation of similar signals coming from the Economy Ministry. It went so far as the EURHUF 380-385 range, and initially nothing happened. Then, more recently the forint edged back towards 385, on the accumulation of bad news like further fiscal loosening, the now nonexistent-looking 'financial shield', a lower rating outlook from Fitch Ratings, etc.Then came the December rate-setting meeting two days ago, when the Council changed their forward guidance, allowing, in principle, for a base rate move whenever the incoming data proves good enough. Obviously, the mar...