NEWS – HUNGARY (10 March 2022)

Devaluation of HUF, the highest in the CEE region

The Hungarian forint’s exchange rate hit a new historic low on Monday, briefly reaching 400 against the euro, dropping by more than 8 percent between February 21st and March 6th Analysts believe the main reason for the extreme decline in the forint’s value is Hungary’s close proximity to the conflict zone, and the country’s high dependence on Russian energy. In fact, 85 percent of the gas and 64 percent of the oil consumed in the country comes from Russia.

Closure of Russian-Controlled Sberbank Hungary

The National Bank of Hungary (NBH) withdrew the lending license of Russian-owned Sberbank Hungary because of its “serious liquidity and capital situation” due to international sanctions against Russia, and ordered the shutdown of the bank, affecting more than 16,000 domestic companies. According to NBH, 61,000 of the bank’s clients could be fully compensated up to the EUR 100,000 limit, but 1,000 clients, who are mostly corporate clients, had more money in the bank than that.

Control on grain exports

As of 6 March 2022, all wheat, rye, barley, oats, maize, soybeans and sunflowers intended for export must be registered with the National Food Chain Safety Authority, with the government having a purchase priority on them until 15 May 2022. Under terms of the decree, the Hungarian government may exercise its right of pre-emption or purchase and may notify the applicant of its intention to exercise its rights within 30 days, if it is determined the export of the declared grain would endanger or jeopardize the security of domestic supply.

Investment of HUF 140 bln for road network development

Hungarian Minister of Finance announced an investment of HUF 140 billion for renewing roads in the countryside, improving thus accessibility of rural settlements and strengthening the local economy.

Decree allowing deployment of NATO troops in western Hungary

A governmental decree published on 7 March 2022 allows NATO troops to be deployed in western Hungary and weapons shipments to cross the Hungarian territory to other NATO member states. The decree, however, states that Hungary does not allow lethal weapons shipments across its territory to Ukraine.

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