HUF Exchange Rate

BudaRich said:
Between now and 2010 the HUF WILL strengthen against the EUR - as it must do to be able to enter the EMU-2
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Exactly what you said more than a year ago. What is still misssing is a robust explanation of why that must happen.

BudaRich said:
I did predict it - and invested accordingly based on the best information at the time.
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In the interests of the welfare of other visitors to this site, would you not consider keeping such gold dust to yourself?
 
Certainly not,

Opinions are just that - your opinion or mine, anyone would be foolish to listen to one point of view. The point is that all points of view must be heard or no balanced conclusion can be made.

Be aware that the consensus view is often wrong - especially when predicting the future. Be careful what you read in the papers since it is usually the consensus perception of reality full of puff pieces supplied by people with vested interests / government spin - not reality itself.

As for this site, I agree some people who have been banned, should not have been banned - more warnings should be given prior to banning.

Also ..... those people who try to stop others from speaking / block freedom of speech should be warned more often and even banned if they persist.

I did predict the credit crunch, even before it was called the credit crunch. I posted on several websites about it referring to it as "debt bomb" and everyone thought i was bonkers back then. I sold my property at the peak of the housing market 20% above asking price and doubled my money by buying gold bullion and as a secondary investment I purchased in Hungary in 2007 since the property marketing machined were focused elsewhere in Bulgaria and Romania and other overhyped markets.

http://www.investopedia.com/terms/d/debtbomb.asp

What I failed to predict was the extent of the falls in the UK & other western countries. I was predicting a 25% fall in 2006 /7 but in reality it will be a 40% fall by the looks of things. I also failed to predict the knock on effects on the Eastern European countries of the Western credit crunch.

I should have put ALL of my money into gold. Although I am happy with my Budapest apartments gold would have made me a better return.
 
The entire CEE region's currencies are unpredictable at the moment. The PLN has dropped even more than the HUF. Unfortunately, they are all in the same 'basket', along with the ailing RUB and values have been moving in tandem over the past while. The past 6-8 months (but mostly since January 2009) have been an absolute roller-coaster, which few people predicted. In 2008, well after the credit crunch was popular knowledge, even Goldman Sachs predicted that the HUF might appreciate to 225. It goes to show that nobody can be any way sure when it comes to currency projections.

Although the National Bank of Hungary is adamant that it will protect the HUF, particularly it it falls below 310 against the EUR, there are so many complex external factors, which determine its value, it's impossible to ascertain what will happen. Will global risk appetite grow over the coming months? Will the HUF, PLN and CZK break away from the RUB and if not, how soon will the RUB recover? Will the German economy get back on its feet?

If we are to believe analysts like Merrill Lynch, the HUF will weaken temporarily and then strengthen to 270, a rate, which I think most parties would be happy with. However, in my opinion, the only certainty is uncertainty. In the last 24 hours, it has swung from 299 to 309 and now back again to 297 against the EUR. It's an extremely erratic currency at the moment.

When Hungary is given a date for entry to ERM-2, more than likely later this year, things should be clearer. I continue to believe that long term prospects are good for the country and for the HUF, when it eventually stabilises.
 
The Swiss Franc moved down around 3% today alone against the Euro just because there was talk of devaluation and a little bit of intervention by the Swiss National Bank. Indirectly this is good news for Hungary in the ultra short term, because they have a lot of debt denominated in francs. But personally, I'd be looking to hedge or reduce any foreign currency exposure rather than increase it. As others have said, these are turbulent times and it would be very easy to get very badly burned. -20%/+30% exchange rate moves HUF/EUR within the last 3 years seem to me to make any property price moves not much more than a side bet in comparison to the inherent currency risks. Anyone with debt in one currency (EUR or CHF mortgage), and income in another (HUF rental), should be thinking very carefully about what they are doing. Especially if they are leveraged up. Imagine the CHF strengthens against the euro (more debt) and the HUF weakens (less income, less capital value), which is not an unlikely scenario.

[broken link removed]

And these graphs looks to be going one way for the technical analysts

http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-huf.en.html

http://finance.yahoo.com/q/bc?s=CHFHUF=X&t=2y
 
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if you were going to bring the money back i would use a currency broker and not the bank as you would get a better exchange rate
 
interestingly, 2 years on from the discussion that started this thread, the HUF is back around 260/265 against the EUR again, from lows around 320.
 
Hi All,


Hoping someone can offer some advise on the following exchange rate question :

In July the rate was 262 HUF to the Euro. Today, it is 282. My understanding is that if the Euro is weakening, which all the press say it is, is this movement not against that trend? I thought a weak euro was good if you were holding HUF?

Anyway, I hope to be holding some HUF shortly through the sale of an apartment (offer acccepted stage) and my question is should I park it in my Citibank HUF account or convert it to euro straight away.

Any advice appreciated and will be treated as advice rather than expert opinion, thanks all
 
I was going to post the same also what is the cheapest way of getting HUF's out of the country I have an Hungarian bank account.
 
Hungary Loan Plan May Be Used by 300,000 People, Orban Says

Hungary’s government expects 150,000 to 300,000 people to make use of a plan that allows borrowers to repay foreign-currency mortgages below market rates, Prime Minister Viktor Orban said.
Hungary plans to enable early repayment of mortgages denominated in Swiss francs oreuros at as much as 20 percent below prevailing rates, Orban told parliament two days ago. The European Union said the proposal may violate its rules and Standard and Poor’s, which rates Hungary one step above junk, said the plan may hurt lending, growth and public finances.
“The number of those with the necessary savings who will decide to get out of their loans may be somewhere between 150,000 and 300,000,” Orban told HirTV in an interview late yesterday.
The figure may rise as borrowers seek help from friends and family and search for other assets, he added.
Two-thirds of Hungarian mortgages are denominated in francs and defaults have risen as the Swiss currency’s advance sent monthly installments soaring. The loan plan is “unacceptable” and poses a “significant threat” to the financial industry, the Hungarian Banking Association said Sept. 12.
The forint dropped 0.8 percent to a one-year low of 287 per euro as of 10:01 a.m. in Budapest. It fell 0.7 percent to 237.9 against the franc, declining for a fourth day.
‘Nothing to Lose’

The loan plan will impose a time limit for participation so banks can calculate the impact on profits, Orban said. Hungary has “nothing to lose” because foreign
lenders have already been withdrawing money from the country and some international banks will still find it profitable to remain, he added.
Investors should sell forint for euros as the Hungarian currency may weaken to 295 in the “near term” because of the plan, UniCredit SpA (UCG) strategist Gyula Toth said today by e-mail.
The government expects companies to challenge the plan in European courts, with potential legal costs to be borne by the state rather than borrowers, Orban
said.
“The forint may stay under pressure,” Bartosz Pawlowski, a strategist at BNP Paribas SA inLondon, said today by e-mail.
OTP Bank Nyrt., Hungary’s largest lender, was little changed at 3,640 forint, after losing 15 percent in the previous three trading sessions. OTP bought back
100,000 of its own shares yesterday at an average of 3,646 forint each, according to a statement today on the Budapest Stock Exchange website.
 
This is going to rumble on and on. The mortgage law in Hungary has been passed, but it is also going to be challenged. The Swiss Frans is pegged, but is under stress. Such uncertainty is rarely good for investor sentiment. No longer are you betting just on a currency play, you're betting on the local politicians' ability to manipulate the market. I would carefully assessing my options at this time if I owned Hungarian property.

http://www.bloomberg.com/news/2011-...pprove-law-on-foreign-currency-mortgages.html

http://www.economist.com/blogs/easternapproaches/2011/09/hungary-and-swissie

http://www.ft.com/intl/cms/s/0/22904922-e835-11e0-9fc7-00144feab49a.html?ftcamp=rss#axzz1ZEnKn9Gn
 
None of what has been happening is having a direct effect on prices though. Banks are being asked to take the hit. Regular Hungarians are actually better off because of this - their debt levels have been decreased, so IMO it's a good idea in terms of encouraging spending increases again. Decreasing consumer debt levels - maybe something Ireland might consider doing! In reality, only 20% of people seem to be in a position to take up the plan in any case, so it may not have a widespread impact.

Obviously the banks are fuming, but they can do nothing and they have all confirmed that they are staying in the market. Profit margins have been incredibly high for the banking sector here for the past decade and competition has been very low.
 
Thanks for the info Budapest et all...on the specific issue of currency fluctuation, is there a consensus that the HUF will contine towards 300 or head back towards 250 V €?
 
IMO it's not going to strengthen anytime soon. 295 may be hit but the range for the foreseeable future will more than likely be approx. 270-295. Rental prospects in Bp are still good. If you are getting good rental and can afford to hold on, then there's probably no real point selling at the moment.
 
Ah, I see that you have probably sold already in which case have a proper analysis of what your requirements are. Nobody knows what will happen with the EUR/HUF, but I don't foresee a HUF collapse. On the plus side, you can get 7% deposit interest rate with several banks in Hungary so if you don't need the money, this could be a good hedge against currency movements. It's a hard one to call though.
 
Thanks Budapest, 7% on deposit sounds like a good option until the rate gets back towards the 270 mark.
 
looks like total freefall for the Forint today after the Gov passed the law with is perceived as weakening the position of the Central Bank. The EU and IMF look to be washing their hands of them too, for now.
the rate was at a record weak level of 317 v EUR, which in the context of a weak EUR is a woeful performance.

If this is a play for more time by the HU Gov, you'd then its years and not months they need.
http://www.portfolio.hu/en/fx/hungary_forint_in_a_freefall_rate_close_to_all-time_peak.23540.html

imho anyone holding HUF should be making use of the high HUF deposit rates to help hedge against the currency movements
 
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