Due to high inflation, a very understandable reorganization took place in the Hungarian savings market in the first quarter of this year, according to the data published by the MNB on Thursday morning: the Hungarian population shifted its savings from current account deposits and cash to government securities and investment funds. While more money flowed into investment funds in the second half of last year, government securities have already regained their first place this year. However, the intensifying search for yield was not enough to preserve the real value of savings, as it continued to deteriorate. We wrote about the details here.
We have less detailed data on savings specifically in foreign currency or held abroad from the (preliminary) financial account statistics, but it is possible to see how much money the population holds in 1. foreign bank deposits, 2. foreign bonds, 3. foreign investment certificates and 4. in currency. Well, in terms of these, 2021 and 2022 brought spectacular growth: the former for investment units, the latter for deposits, bonds and currency.
Last year, HUF 531 billion net flowed into foreign deposits, HUF 241 billion into foreign bonds and HUF 117 billion into foreign currency.
It can be said that at the end of March this year
12% of household deposits, 4% of bonds, 12% of household investment units, and 7% of cash were held abroad or in foreign currency. The average in these four categories was 8.6%.
(This does not include assets held in foreign currency by domestic service providers).
These ratios are higher than a few years ago, but at the same time, the first quarter of this year did not prove the correctness of this strategy in the short term, at least for those who then use these savings in forints (with domestic spending):
contrary to the expectations of many, the forint strengthened, so for example, between December 31 and March 31, savings held in euros lost an average of 4.8% of their forint value only because of the strengthening of the forint
(it is not known what percentage of the mentioned savings is in other currencies). Due to negative revaluations alone, the HUF value of foreign deposits deteriorated by HUF 91.7 billion, bonds by HUF 6.6 billion, foreign investment units by HUF 13.7 billion, and currencies by HUF 25.8 billion in the first quarter. can be explained.
The strengthening of the forint and, as a result, the lowering of expectations related to the weakening of the forint seem to have left a mark on the currency turnover of currency exchange offices and bank branches. The MNB publishes separate data series on this, which show that
in January and February, the volume of currency purchases decreased compared to the average of the previous months,
and a year earlier, for example, we saw a strengthening at the beginning of the year, so seasonality is not necessarily a good explanation for this.
Cover image: Getty Images
Source: Portfolio.hu – Befektetés by www.portfolio.hu.
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