Societe Generale analysts report that the EUR/HUF currency pair's decline in February stalled near 374, followed by a sharp rebound toward 400, with the 50-day moving average at 383/381 acting as a key support level [1]. The analysts expect possible consolidation between 383 and 396, cautioning that a break below this support could revive the broader downtrend [1]. Hungary's vulnerability to oil price shocks and upcoming elections are highlighted as significant factors influencing the forint's prospects [1].
The National Bank of Hungary (MNB) is expected to leave its policy rate unchanged at 6.25% today, as Hungary's sensitivity to oil price increases argues against further monetary easing, despite headline inflation slowing sharply to 1.4% in February, which is well below the MNB's target rate of 2-4% [1]. Societe Generale notes that elevated geopolitical uncertainty suggests an extended period of policy stability, with the MNB estimating that a 10% rise in oil prices would add roughly 0.3–0.4 percentage points to headline CPI, about double the impact seen in the eurozone [1].
Given the current low inflation, such an increase would still keep inflation within the tolerance band. Societe Generale forecasts a gradual rise in inflation towards 4% by December, assuming oil prices ease in the coming weeks. However, if crude remains above $100 per barrel, inflation could reach 5% by the end of 2026 [1]. A squeeze in EUR/HUF towards 420 may prompt the MNB to tighten policy in the near term [1].
On the political front, a market-friendly election outcome next month could push EUR/HUF down toward the 370 area from its current level around 390. Societe Generale remains constructive on the forint and local HUF bonds, suggesting positive prospects if political and oil-related risks are managed [1].
CONCLUSION
Societe Generale sees the Hungarian forint's outlook as closely tied to oil prices and political developments, with policy stability expected in the near term. While inflation is currently low, risks from oil price shocks and elections could drive significant moves in EUR/HUF and prompt monetary tightening. The bank maintains a constructive view on the forint and local bonds, contingent on favorable market and political outcomes.