Hungary is particularly exposed because of its heavy reliance on imports, rising inflation expectations and the risk of sharper forint volatility.

Higher energy costs could also complicate monetary policy across the region, prompting central banks to delay further rate cuts.

The MNB lowered its base rate to 6.25% last week after an 18-month pause, and markets had anticipated additional easing in March.

ING argues that a weaker forint and costlier energy may derail those expectations ahead of the MNB’s next rate-setting meeting in three weeks.

The renewed geopolitical tensions come after investors built sizeable carry-trade positions in emerging-market currencies.

The forint appears especially vulnerable: substantial positions have accumulated over the past year, supported by high interest rates and election-related optimism.

Should sentiment shift, the currency could slide back beyond 380 against the euro, ING says.

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