The Hungarian forint is Hungary's national currency. In some areas, however, especially tourist destinations, the euro is also accepted. The Hungarian National Bank is responsible for issuing the country's currency. The bank’s activities include developing security measures to prevent fraud and counterfeiting of currency, controlling the flow of currency in the country, and releasing official publications of exchange rates. The bank also includes the monetary council responsible for maintaining the inflation rate at around 3%.
History of Currency in Hungary
Before the separation of Hungary and Austria, the krone served as the official currency. The krone was replaced after the Treaty of Saint-Germain in 1919. Hungary adopted the Hungarian korona as its currency. The Hungarian pengȍ replaced the korona in 1927 at a rate of 12,500 korona to one pengȍ. The Hungarian pengȍ gave hope to the stabilization of the post World War I economy, which faced high inflation levels. However, the currency could not stand the hyperinflation after the World War II and became worthless. The pengȍ (P) had 100 sub-units, referred to as fillers. Before the collapse of the pengȍ in the hyperinflation of the 1940s, large currencies including the milpengo and the bilpengo were circulated. The introduction of the adopengo proved futile in dealing with the inflation and a new currency had to be introduced.
The Hungarian forint is the official currency of Hungary introduced shortly after the World War II. In the aftermath of the World War II, the economy of Hungary went through a period of hyperinflation, devaluing the then active pengȍ. Each Hungarian forint had divisions of 100 fillers, whose coins were devalued by inflation in the last half of the 20th century and their circulation had ceased by 1999. The Hungarian forint has the abbreviation Ft and the ISO code HUF. The currency is stable and has managed to withstand the inflation of the 1970s and 1980s, and currently has an inflation rate of 1.3%. The Hungarian forint circulates in both coins and banknotes of various denominations. Coins are minted in denominations of 5, 10, 20, 50, 100, and 200 forint, and banknotes are produced in 500, 1,000, 2,000, 5,000, 10,000 and 20,000 forint denominations.
Design of Banknotes
Hungarian banknotes have a standard size of 154mm by 70 mm. The Hungarian Banknote Printing Corporation prints all banknotes for Hungary on paper produced by the Diosygor paper mill. All banknotes are printed with the image of a famous Hungarian on one side and an icon associated with the politician on the reverse. For security, banknotes are watermarked and fitted with additional security features such as holographic strips, especially for high-value banknotes. Several commemorative notes such as 1,000, 2,000, and 500 forint notes have been printed to celebrate the millennium and the silver jubilee of the 1956 revolution.
Future Adoption of the Euro
In an effort to increase foreign investment of the country, Hungary plans to introduce the euro as the official currency in place of the forint. However, since the establishment of the plans in 2003, the euro has yet to become the official currency due to budget deficits, inflation, and high public debt. Various experts predict that the earliest time for the adoption of the euro would occur between 2015 and 2020.