A rare occasion: PM Orbán comments on the forint's exchange rate

HUNGARY - In Brief 17 Feb 2025 by Istvan Racz

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This morning, PM Orbán has put on to his facebook a short video. In this, he is sitting at his desk, attentively studying a full-page chart with European gas prices. Asked from the backstage how the week is going, he says that they closed last week and also started this week with the discussion of economic matters. Bringing global politics and the economy together, he is pointing at the chart, saying that the start of talks between the US and Russia, marked by a phone call between Messrs. Trump and Putin, has already caused gas prices to fall by 10%, and the forint also gained momentum. Then he goes on: "If this continues to go this way, then the forint may even pay a visit to the territory below (EURHUF) 400." He concludes by saying: "This is what peace does." It is quite a rare occasion that Mr. Orbán comments on (short-term) economic matters is such a specific form. The message appears to be twofold. First, he once again praises Mr. Trump and his intervention into war matters, indirectly stressing how positive it is that he (Mr. Orbán himself) took side with the new US president very emphatically. Second, he refers to the most recent strengthening of the forint in a positive way, thereby essentially making a verbal intervention supporting the currency. The latter must be connected with the government's express dissatisfaction with the January inflation data. The longer term, though no doubt somewhat vague, suggestion may be that the government will not necessarily aim for a weak forint under the new MNB management from early March, with a view to boosting domestic growth that way. This is not at all surprising, we believe. We have always had the view that an upturn ...