Emerging market currencies continued to pull back Thursday, with the Hungarian forint one of the worst hit — and there are worries it could be the next to take a dive, like the Argentinian peso.
(Read more: Argentinepeso suffers steepest daily fall since 2002)
The forint bore the brunt of selling pressure on Thursday, falling further against the U.S. dollar to 227.55. It is now down 5.34 percent since the beginning of this year.
The forint has also fallen more than 4 percent against the euro and the swiss franc, the currencies of its major trading partners, this year.
Nicholas Spiro of Spiro Sovereign Strategy told CNBC that the forint was more at risk than some EM currencies, because the Hungarian central bank had an incentive to keep the forint weak — namely, shoring-up exports. This contrasts with the central banks of India and Turkey, which moved to boost their currencies this week by hiking interest rates.
"It (the forint) certainly hasn't collapsed and what is very important here is that the Hungarian central bank wants a cheaper currency — it is an export-driven economy and the economy needs a very competitive currency," said Spiro.
"This is a country which has considerably levels of foreign currency-denominated debt particularly in the residential mortgage market and still haven't been able to deal with that problem in a convincing manner," he added.
(Read more: 'Currency War' end-game could be good for Russia)
The Hungarian central bank has slashed interest rates by 415 basis points since the end of 2012 and remains committed to cutting interest rates further in order to combat very low inflation.
Spiro described the central bank's lack of concern about currency depreciation as perturbing.
"The central bank doesn't seem to be particularly worried – that is what is worrying. Clearly Hungary isn't Turkey (which hiked interest rates to 12 percent this week), but it is looking very shaky right now. It is clearly the weakest of the central European credits," he said.
(Read more: Hungary central bank 100% independent: Governor)
However, not everyone believes Hungary will be swept up in the emerging markets turmoil — and it is Hungary's close ties to European Union that may protect it.
Lee Hardman and Derek Halpenny of Bank of Tokyo-Mitsubishi said the forint — and the Polish zloty — would benefit from the gradual strengthening of the euro zone economy this year.
"Both currencies are also less exposed to the risk of capital outflows potentially triggered by the ongoing normalization of Fed monetary policy," the analysts said in a research note this month.
—By CNBC's Katy Barnato. Follow her on Twitter: @KatyBarnato
