Hungary’s forint, the South African rand and the Turkish lira will be the region’s best-supported currencies in 2027, ING said in its EMEA FX Outlook 2027 published on November 12.
Restrictive monetary policy and attractive carry should keep most EMEA currencies supported next year, but performance will diverge more as high global yields, energy prices, fiscal risks and geopolitics weigh, according to the bank’s team of 11 economists led by Chris Turner. The Czech koruna should stay supported while the Polish zloty faces fiscal and political pressure, ING said, adding that it has shifted its view on the zloty from neutral to mildly negative.
The forecasts show how far central banks across the region are leaning on high real interest rates to hold their currencies steady after a year shaken by the war between the US, Israel and Iran and the energy price shock that followed. ING expects the CEE currencies to move by 2% or less against the euro by end-2027. The bigger moves are further east and south: the lira is forecast to lose a fifth of its value against the dollar and the Kazakh tenge about 9%, while the rand and the Israeli shekel gain about 4%.
The forint remains ING’s preferred Central European currency. The bank expects the National Bank of Hungary (NBH) to hold its base rate at 5.50% for the next nine to 12 months and sees EUR/HUF in a 350-370 range, ending 2027 at 360 against 364 now. Fiscal consolidation, EU-fund inflows, an expected return of the current account to surplus and possible rating upgrades should keep the forint at the stronger end of that range, ING said. The government’s 2027 budget was welcomed by Fitch as a sign of commitment to consolidation, and ING sees Hungary on a path towards the EU’s Exchange Rate Mechanism (ERM) II at the start of 2029.
The zloty is ING’s laggard in the CEE3. Its forecast still has EUR/PLN easing to 4.31 by end-2027 from 4.40, but it expects a 4.32-4.45 range in the coming months with risks skewed towards a weaker currency. Rate hikes by the Fed and the European Central Bank have narrowed Poland’s interest rate advantage, Poland’s fiscal deficit is the largest in the EU and ING expects no meaningful consolidation before the 2027 parliamentary elections. Moody’s cut Poland’s rating in September and S&P turned its outlook negative in November. “Loose fiscal policy ahead of the elections makes a return to the stronger levels seen in the first half of this year unlikely,” ING said.
The koruna should benefit from positive nominal and real rate differentials with the eurozone after the Czech National Bank raised its rate to 4% in two steps, although weak growth argues against a new hiking cycle. ING forecasts EUR/CZK at 24.17 at end-2027. Romania’s leu is set for further controlled depreciation to 5.45 per euro by end-2027 from 5.35, with the National Bank of Romania expected to cut by 50bp in 2027 from 6.50%. Serbia’s dinar should stay near 117 per euro after the National Bank of Serbia raised its rate to 6% in November.
ING favours the lira for its carry while forecasting further depreciation, with USD/TRY seen at 62.50 at end-2027 from 50.26 now while the Central Bank of Turkey eases gradually to a policy rate of 30% by end-2027 against annual inflation ING forecasts at 26%. Renewed reserve accumulation and contained demand for hard currency suggest the current exchange-rate regime will stay in place ahead of the 2028 election period, ING said.
The rand should be supported by a hawkish South African Reserve Bank, which has hiked twice this year, with markets pricing another 75bp of tightening to 8.00% over the next 12 months. ING forecasts USD/ZAR at 16.00 at end-2027 from 16.66, and says progress on energy and freight reforms could help further. The rand fell 0.9% on November 11 on a stronger dollar and weak economic data.
In the former Soviet Union, ING expects Ukraine’s hryvnia to slide gradually towards 46 per dollar in the coming months as the National Bank of Ukraine keeps its policy of “managed flexibility”, after rate hikes totalling 150bp since the summer. The tenge is forecast to weaken to 485 per dollar by end-2027 from 443 even though high real rates should survive the National Bank of Kazakhstan’s easing cycle, which has taken the base rate to 15.75%. A $2.2bn backlog of National Fund-related foreign currency sales built up between June and October gives the authorities a buffer if portfolio inflows reverse, ING said.
Implied change in each currency from ING’s spot to its end-2027 forecast. Source: ING EMEA FX Outlook 2027, November 12, 2026. IntelliNews
This article was produced with the help of the IntelliNews Lambda analytical tool
www.intellinews.com