My second research project was also conducted within the framework of the Scientific Students’ Association Conference organised by the Corvinus University of Budapest. In this institution-level competition, I participated in the Economic Policy and Macroeconomics Section and was nominated to the National Scientific Students’ Association Conference. This country-level event is going to be held at the University of Miskolc in 2025. With the nomination, the paper will be accepted as my bachelor’s degree thesis.
The central theme of my thesis is investigating the impact of monetary policy decisions on the exchange rate market and their potential for significant influence. For examining the short-term effects of monetary interventions, I used qualitative methods. My thesis was divided into two main sections: in the first one, I examined indirectly in the long-term, using the VAR (vector autoregression) models. Then in the second one, different kinds of statistical hypothesis tests (t-tests) were conducted, in a more direct way. This is to prove my hypothesis, that there is no significant change in the euro forint exchange rate in the short-term. My thesis concludes that the forint exchange rate in the short term is not solely affected by monetary decisions, such as interest rate increases, as supported by literature review and empirical analysis. Therefore, my hypothesis is accepted, indicating that other factors also influence the forint exchange rate apart from monetary decisions.
After the MNB (National Bank of Hungary) closed its longest and largest monetary tightening cycle in the third quarter of 2022, the forint exchange rate started to fall drastically, especially against the euro. This decision triggered a strong and displeasing reaction from the public. The indignation caused by this made the press loud and excited my curiosity. Therefore, the central theme of my thesis is investigating the impact of monetary policy decisions on the dynamic exchange rate market and their potential for significant influence. For examining the short-term effects of monetary interventions, I use qualitative methods. My thesis is divided into two main sections: in the first one, I examine indirectly in the long-term, using the VAR (vector autoregression) models that are characteristic in macroeconomic analysis. Then in the second one, different kinds of statistical hypothesis tests (t-tests) are conducted, in a more direct way. This is to prove my hypothesis, that there is no significant change in the euro forint exchange rate in the short-term. In summary, my thesis concludes that the forint exchange rate in the short term is not solely affected by monetary decisions, such as interest rate increases, as supported by literature review and empirical analysis. Therefore, my hypothesis is accepted, indicating that other factors also influence the forint exchange rate apart from monetary decisions.