Equilor Trader review: Broker highlights MNB high-rate stance as key driver of forint strength

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Olga Shendetskaya

04.11.2025

Equilor Trader review: Broker highlights MNB high-rate stance as key driver of forint strength — Equilor warns that devaluation no longer sustainable path for Hungary’s growth

Equilor Trader’s latest market analysis highlights the Hungarian forint’s (HUF) remarkable performance this year, emerging as one of the best-performing emerging market currencies.

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After years of steady depreciation, the forint’s reversal is driven by stabilizing economic data and a decisive shift in the Magyar Nemzeti Bank’s (MNB) communication strategy. Despite global volatility, the forint has strengthened as investors respond positively to the central bank’s commitment to maintaining higher interest rates. Equilor notes that while foreign currency investments once benefited from a weakening HUF, 2024 has favored domestic assets as monetary conditions stabilize.

Economic backdrop: inflation easing and imports rising

Inflation, which remained in double digits between 2022 and 2023, has now fallen closer to the MNB’s tolerance band, aided partly by price cap measures contributing around 1.5 percentage points to inflation control. Equilor points out that Hungary’s import ratio — about 70% of GDP — means exchange rate movements directly impact inflation through import prices.

A stronger forint, therefore, may help curb price pressures. However, weak eurozone growth continues to challenge export expansion, and domestic demand has softened compared to 2022 levels. The analysis underscores that while external balances have improved, Hungary’s economy remains sensitive to global and regional shifts.

Outlook: competitiveness, interest rates, and sustainability

According to Equilor, Hungary’s external financing capacity, which combines the current and capital accounts, has improved from post-pandemic lows but remains a key vulnerability indicator. The brokerage stresses that currency devaluation cannot sustainably drive growth in the current environment, as fiscal easing and credit expansion offset potential trade benefits.

Instead, long-term competitiveness must come from productivity and innovation rather than exchange rate adjustments. With the MNB favoring persistently high rates to suppress inflation, the forint’s outlook appears stable to slightly bullish. Equilor concludes that structural policy consistency — not devaluation — will define Hungary’s economic resilience going forward.

Recently we wrote that trading the financial markets often hinges on spotting subtle price patterns before momentum shifts. In its latest educational analysis, Aron Groups highlights the hammer and inverted hammer candlestick formations as crucial signals for identifying potential market reversals.

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