The forint had an outstanding year in 2025; the Hungarian currency was one of the stars of the market globally, writes the Portfolio news outlet. The reason for this is the high interest rate difference: while the MNB kept the base interest rate at 6.5 percent throughout the year, the developed central banks and regional institutions significantly reduced their own interest rates. And the widening interest rate differential has stirred the imagination of carry trade investors, who seek to profit from the difference between borrowing at low rates and investing at higher rates. 

This process led to the Hungarian currency appreciating by more than 6 percent against the euro and by 17.5 percent against the dollar in just one year. 

In the former case, there has not been a greater strengthening against the dollar since 2012, and since 2002, that is, the forint has not had such a good year in more than 20 years. There is a relatively small chance that even this will be surpassed by the domestic currency in 2026.

In 2026, a significant additional capital inflow is no longer expected, and the question may be when investors will close these positions. If the capital goes out en masse, it may even bring a sudden significant weakening of the forint. Several analysts have warned that at the end of the year, we could already see signs that some investors are closing their positions and pocketing profits.

According to experts, inflation may drop to close to 2 percent at the beginning of the year, and from the point of view of the central bank, it will be crucial how the traditional January repricings and the basic processes develop. Margin stops will continue to reduce inflation by 1-1.5 percentage points; however, if the basic inflation processes develop favorably in the first months, the central bank may even try to reduce interest rates regardless. This, in turn, might lead to a weakening of the forint.

The most important event of the year could be the April parliamentary elections. Several international analysts have already mentioned the so-called Tisza-bet, which may indicate that a significant part of the market expects the victory of the opposition Tisza Party.

As Portfolio writes, the fact that a significant number of investors evaluate the possible victory of the party currently in opposition as a realistic option may have played a role in the strengthening of the forint last year.

The Tisza Party is openly campaigning to improve access to EU funds and even put the introduction of the euro on the agenda for the longer term. What Tisza would achieve in the event of a possible victory is another question. As known, Péter Magyar, Orbán’s main political rival, is careful not to say anything specific on important issues, but the leaked Tisza budget package has revealed that significant budget cuts and austerity would lie ahead for Hungary were the party to come to power.