MNB is ready to intervene for the forint, offering the sale of FX to energy importers

HUNGARY - In Brief 10 Mar 2026 by Istvan Racz

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The Monetary Council decided this afternoon to offer the sale of foreign currencies to energy importers, for the MNB to secure the availability of FX liquidity at the current increased level of import prices. As Vice Governor Kurali commented, they want to eliminate the risk that the market could read too much into the link between energy sector and currency market developments, potentially raising inflationary expectations. This program has no preset size, and the MNB is not going to tell publicly what amounts it has actually transacted this way.Apparently, the MNB did not like the most recent depreciation of the forint, to EURHUF 398 two days ago, from the EURHUF 375 level immediately before the start of shooting in the Middle East. Now, that the Iranian nuclear arms program has been annihilated once again, the second time within a year, according to Mr. Trump, EURHUF has returned to the 387 level by early afternoon today. But exactly these huge swings demonstrate the extreme volatility of markets, in response to quickly changing geopolitical developments.Can the MNB reasonably and safely do this kind of intervention? Well, yes, absolutely: they had FX reserves of €59.9bn at end-February, an absolutely outstanding record high, against a total of €7.5bn worth of annual net imports of gas, oil and electricity.Will the MNB reduce the base rate further in March? Probably not, even though the February CPI-inflation data, published this morning, would very much allow a further reduction by 25 bps. The headline rate fell further to 1.4% yoy, from 2.1% yoy in the previous month, the lowest figure since November 2016. So, the results of the usual early-year repricing actions ...