The Hungarian forint is issued by the Hungarian National Bank (HNB)as the official currency of Hungary. The forint has declined significantly in value against other western currencies since the global credit crisis took serious hold in mid-2008 and the HNB's subsequent rapid-fire cuts in official interest rates, although it's expected to appreciate soon as official rates start rising again.
The Hungarian forint (HUF) was a non-convertible currency until 2001, the year the World Bank issued its first-ever HUF-denominated bond - a HUF 10 billion one-year issue with a coupon of 9.25%. The currency's name derives from the gold coins (fiorino d'oro) first minted in the Italian city of Florence in the 13th century and used the following century in Hungary under the name florentinus - later forint. It was reintroduced as the official currency in 1946 after post-war inflation wiped out the value of its predecessor, the pengo.
In the goulash
Following the collapse of investment bank Lehman Brothers in September 2008, the HUF's value slid rapidly against the US dollar and the euro over the following months to February 2009. Over that period the forint has declined from about 240 to the euro to just over 300 and from around 165 to the dollar to about 235. Some commentators earlier predicted a further softening of the HUF's value, bottoming-out at around 300 to the US dollar.
However, the forint should get a boost from an expected rise in official Hungarian interest rates in early 2009, financial markets indicate. Prices on futures of Hungarian bonds in late February show that investors believe that in around May 2009 the Hungarian National Bank will increase rates by 50 basis points to 10%, forced to act by weakening curency.
- First Hungarian Forint Bond of the World Bank. World Bank.
- Hungarian forint: Encyclopedia II - Hungarian forint - History. Global Oneness.
- Forint tumbling. henrycopeland.
- Weaker Forint May Spur Higher Hungary Interest Rates. Bloomberg.