The key question: Which exchange rate counts?
The rule seems simple: the official mid-rate of the Hungarian National Bank (MNB) is always the benchmark. But it makes a big difference which day’s rate you have to use.
For invoices, the amount eligible for reimbursement must be converted into HUF using the MNB mid-rate valid on the date of physical performance. If an advance payment was made in foreign currency, then the applicable rate is the one valid on the date of physical performance of the related partial or final invoice.
Foreign invoices often contain only one date. In such cases, there’s no choice: that single date must be treated as the date of performance, and the conversion into HUF has to be done using the MNB rate of that day.
What about quotations?
It’s not only invoices that need to be converted - quotations must also be translated into HUF. Here, the decisive factor is the issue date of the quotation. At first glance this seems straightforward, but think about it: in a grant project you’re planning months ahead. What costs EUR 10,000 today may equal only HUF 3.7 million in six months’ time, or just as well HUF 4.5 million. The exchange rate fluctuates in the meantime, and your budget can quickly lose its stability.
Can we gain from it? The two-faced game of exchange rates
Here comes the twist: the beneficiary may actually benefit from the exchange rate if the forint strengthens over time. But the opposite is also true: if the forint weakens, you’ll need to account for more in HUF than originally planned. In other words, the financial balance of your project is partly dictated by the currency market, a factor completely outside the applicant’s control.
Put simply: with the grant, you gain not only opportunities but also risk.
How to handle it smartly?
There’s no magic spell to eliminate exchange rate risk. Some choose to think ahead and open a foreign currency account, while others set aside reserves to cover potential losses. One thing is certain: you must know the rules precisely, because when it comes to financial reporting, there are no exceptions.
And that’s the big takeaway: in grant projects, it’s not enough to write a good business plan. You also have to pay close attention to the financial details, especially if foreign currency obligations are involved.
For more information or advice, please fill out our contact form.