Hungarian forint

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Hungarian forint
Magyar forint (Hungarian)
Uj forintok.png
The banknotes of the Hungarian forint
ISO 4217
CodeHUF
Number348
Exponent2
Denominations
Subunit
1100 fillér
(defunct)
Plural forintok (nominative only)
Symbol Ft
Banknotes 500 Ft, 1000 Ft, 2000 Ft, 5000 Ft, 10,000 Ft, 20,000 Ft
Coins
Freq. used5 Ft, 10 Ft, 20 Ft, 50 Ft, 100 Ft, 200 Ft
Rarely used1 Ft, 2 Ft (defunct)
Demographics
Date of introduction1 August 1946
User(s) Flag of Hungary.svg Hungary
Issuance
Central bank Hungarian National Bank
Website www.mnb.hu
Printer Pénzjegynyomda Zrt. Budapest
Website www.penzjegynyomda.hu
Mint Hungarian Mint Ltd.
Website www.penzvero.hu
Valuation
Inflation 2.8% (2018)
SourceTrading Economics

The forint (sign Ft; code HUF) is the currency of Hungary. It was formerly divided into 100 fillér, but fillér coins are no longer in circulation. The introduction of the forint on 1 August 1946 was a crucial step in the post-World War II stabilisation of the Hungarian economy, and the currency remained relatively stable until the 1980s. Transition to a market economy in the early 1990s adversely affected the value of the forint; inflation peaked at 35% in 1991. Since 2001, inflation is in single digits, and the forint has been declared fully convertible. [1] As a member of the European Union, the long-term aim of the Hungarian government may be to replace the forint with the euro, but that does not appear to be likely until some time during the 2020s. [2] [3] [4]

Contents

History

Forint from Louis I of Hungary (1342-1382). Reverse: LODOVICVS DEI GRACIA REX. Obverse: S[ANCTVS] IOHANNES B[APTISTA]. Lajos I florint 768761.jpg
Forint from Louis I of Hungary (1342–1382). Reverse: LODOVICVS DEI GRACIA REX. Obverse: S[ANCTVS] IOHANNES B[APTISTA].
Forint from Matthias Corvinus of Hungary (1458-1490). Obverse: S[ANCTVS] LADISLAVS REX. Reverse: MATHIAS D[EI] G[RATIA] R[EX] VNGARIE. 111 Matthias Corvinus florint 755820.jpg
Forint from Matthias Corvinus of Hungary (1458–1490). Obverse: S[ANCTVS] LADISLAVS REX. Reverse: MATHIAS D[EI] G[RATIA] R[EX] VNGARIE.

The forint's name comes from the city of Florence, where gold coins called fiorino d'oro were minted from 1252. In Hungary, florentinus (later forint), also a gold-based currency, was used from 1325 under Charles Robert, with several other countries following Hungary's example. [5]

Between 1868 and 1892 the forint was the name used in Hungarian for the currency of the Austro-Hungarian Empire, known in German as the gulden or florin. It was subdivided into 100 krajczár (krajcár in modern Hungarian orthography). [6]

The forint was reintroduced on 1 August 1946, after the pengő was rendered almost worthless by massive hyperinflation in 1945–46: the highest ever recorded. This was brought about by a mixture of the high demand for reparations from the USSR, Soviet plundering of Hungarian industries, and the holding of Hungary's gold reserves in the United States. [7] The different parties in the government had different plans to solve this problem. To the Independent Smallholders' Party—which had won a large majority in the 1945 Hungarian parliamentary election—as well as the Social Democrats, outside support was essential. However, the Soviet Union and its local supporters in the Hungarian Communist Party were opposed to raising loans in the West, and thus the Communist Party masterminded the procedure using exclusively domestic resources. The Communist plan called for tight limits on personal spending as well as the concentration of existing stocks in state hands. [8]

The forint replaced the pengő at the rate of 1 forint = 4×1029 pengő—dropping 29 zeroes from the old currency. In fact, this was an imaginary exchange rate. With the highest value note being 100 million B. pengő (1020 pengő), the total amount of pengő in circulation had a value of less than 0.1 fillér. (The "B" stood for an old-style "billion", i.e. a million million.) Of more significance was the exchange rate to the adópengő of 1 forint = 200 million adópengő.[ citation needed ]

Historically the forint was subdivided into 100 fillér (comparable to a penny), although fillér coins have been rendered useless by inflation and have not been in circulation since 1999. (Since 2000, one forint has typically been worth about half a US cent or slightly less.) The Hungarian abbreviation for forint is Ft, which is written after the number with a space between. The name fillér, the subdivision of all Hungarian currencies since 1925, comes from the German word Vierer which denoted a four-krajcár-piece. The abbreviation for the fillér was f, also written after the number with a space in between.[ citation needed ]

When the forint was introduced, its value was defined on the basis of 1 kilogram of gold being 13 210 forints. Therefore, given that gold was fixed at US$35 per Troy ounce, one USD was at that time worth 11.74 forints.

After its 1946 introduction, the forint remained stable for the following two decades, but started to lose its purchasing power as the state-socialist economic system (Planned economy) lost its competitiveness during the 1970s and 1980s. After the democratic change of 1989–90, the forint saw yearly inflation figures of about 35% for three years, but significant market economy reforms helped stabilize it.

Coins

In 1946, coins were introduced in denominations of 2, 10, 20 fillérs and 1, 2, 5 forints. The silver 5 forint coin was reissued only in the next year; later it was withdrawn from circulation. 5 and 50 fillérs coins were issued in 1948. In 1967, a 5 forint coin was reintroduced, followed by a 10 forint in 1971 and 20 forint in 1982.

In 1992, a new series of coins was introduced in denominations of 1, 2, 5, 10, 20, 50, 100 and (a somewhat different, 500 silver) 200 forint. Production of the 2 and 5 fillér coins ceased in 1992, with all fillér coins withdrawn from circulation by 1999. From 1996, a bicolor 100 forint coin was minted to replace the 1992 version, since the latter was considered too big and ugly, and could easily be mistaken for the 20 forint coin.

Silver 200 forint coins were withdrawn in 1998 (as their nominal value was too low compared to their precious metal content); the 1 and 2 forint coins remained legal tender until 29 February 2008. [9] For cash purchases, the total price is now rounded to the nearest 5 forint (to 0 or to 5). [10] A new 200 forint coin [11] made of base metal alloy was introduced in place of the 200 forint bank note on 15 June 2009.

Banknotes

In 1946, 10- and 100-forint notes were introduced by the Magyar Nemzeti Bank (Hungarian National Bank). A new series of higher quality banknotes (in denominations of 10, 20 and 100 forints) were introduced in 1947 and 1948. 50-forint notes were added in 1953, 500-forint notes were introduced in 1970, followed by 1,000 forints in 1983, and 5,000 forints in 1991.

A completely redesigned new series of banknotes in denominations of 200, 500, 1,000, 2,000, 5,000, 10,000 and 20,000 forints was introduced gradually between 1997 and 2001. Each banknote depicts a famous Hungarian leader or politician on the obverse and a place or event related to him on the reverse. All of the banknotes are watermarked, contain an embedded vertical security strip and are suitable for visually impaired people. The 1,000 forints and higher denominations are protected by an interwoven holographic security strip. The notes share the common size of 154 mm × 70 mm (6.1 in × 2.8 in). The banknotes are printed by the Hungarian Banknote Printing Corp. in Budapest on paper manufactured by the Diósgyőr Papermill in Miskolc.

Commemorative banknotes have also been issued recently: 1,000- and 2,000-forint notes to commemorate the millennium (in 2000) and a 500-forint note to commemorate the 50th anniversary of the 1956 revolution (in 2006).

Forgery of forint banknotes is not significant. However, forged 20,000-forint notes printed on the paper of 2,000-forint notes after dissolving the original ink might come up and are not easy to recognize. Another denomination preferred by counterfeiters was the 1,000-forint note until improved security features were added in 2006.

Worn banknotes not anymore fit for circulation are withdrawn, destroyed and turned into briquettes which are donated to public benefit (charitable) organizations to be used as heating fuel. [12]

In 2014, a new revised version of the 1997 banknote series was gradually put into circulation beginning with the 10,000 Ft banknote in 2014 and completed with the 500 Ft banknote in 2019.

Current exchange rates

Current HUF exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE.com: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA: AUD CAD CHF EUR GBP HKD JPY USD
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD

Historic rates

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Austro-Hungarian krone

The Krone or korona was the official currency of the Austro-Hungarian Empire from 1892 until the dissolution of the empire in 1918. The subunit was one hundredth of the main unit, and was called a Heller in the Austrian and a fillér in the Hungarian part of the Empire.

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Hungarian pengő Former currency of Hungary, used 1927–1946

The pengő was the currency of Hungary between 1 January 1927, when it replaced the korona, and 31 July 1946, when it was replaced by the forint. The pengő was subdivided into 100 fillér. Although the introduction of the pengő was part of a post-World War I stabilisation program, the currency survived for only 20 years and experienced the most serious case of hyperinflation ever recorded.

Austro-Hungarian gulden

The Gulden or forint was the currency of the lands of the House of Habsburg between 1754 and 1892, when it was replaced by the krone/korona as part of the introduction of the gold standard. In Austria, the Gulden was initially divided into 60 Kreuzer, and in Hungary, the forint was divided into 60 krajczár. The currency was decimalized in 1857, using the same names for the unit and subunit.

Fillér was the name of various small-denomination coins throughout Hungarian history. It was the 1100 subdivision of the Austro-Hungarian and the Hungarian korona, the pengő and the forint. The name derives from the German word vier (four). Originally it was the name of the four-kreuzer coin. Due to significant inflation that took place after the fall of communism, fillér coins are no longer in circulation. The last fillér coin, worth 50 fillér was removed from circulation in 1999. However, it continues to be used in calculations, for example in the price of petrol, or in the prices of telephone calls.

Hungarian korona

The Hungarian korona was the replacement currency of the Austro-Hungarian Krone/korona amongst the boundaries of the newly created post-World War I Hungary. It suffered a serious inflation and was replaced by the pengő on 1 January 1927.

Hungarian forint coins are part of the physical form of current Hungarian currency, the Hungarian forint. Modern forint coins have been struck since 1946 and reflect the changes of post-World War II Hungarian history.

Hungarian forint paper money is part of the physical form of the current Hungarian currency, the Hungarian forint. The forint paper money consists exclusively of banknotes. During its history, denominations ranging from 10 to 20,000 forint were put into circulation in correspondence with the inflation which raised needs for higher denominations. Recently, commemorative banknotes were issued as well.

Hungarian pengő coins were part of the physical form of Hungary's historical currency, the Hungarian pengő. Initially, higher value coins were made of silver to reflect value and stability. Later, during the second world war, these coins were replaced first by banknotes and later by aluminium coins. By the end of 1945, pengő coins completely lost their value due to rampant inflation.

Hungarian pengő paper money was part of the physical form of Hungary's historical currency, the Hungarian pengő. Paper money usually meant banknotes, which were issued by the Hungarian National Bank. Later – during and after World War II – other types of paper money appeared, including emergency money, bonds and savings certificates.

The paper money of the Hungarian korona was part of the circulating currency in the post-World War I Kingdom of Hungary until the introduction of the pengő in 1927. The variety of the banknotes and treasury notes and the variety of issuing authorities reflect the chaotic postwar situation in the country.

The banknotes of the Yugoslav dinar are the several series of paper money emitted by the central bank of the different consecutive states named Yugoslavia.

References

  1. BBC News Hungary lifts last currency restrictions. 18 June 2001
  2. "Hungary's New Notes Speak of Late Conversion to Euro". The Wall Street Journal. 1 September 2014. Retrieved 24 May 2015.
  3. "HUNGARY'S ECONOMY MINISTER SEES POSSIBILITY FOR ADOPTING EURO BY 2020 – UPDATE". Daily News Hungary. 3 June 2015.
  4. "Hungary mulls euro adoption by 2020". BR-epaper. 19 July 2016.
  5. Engel, Pál, 1938-2001. (2001). The realm of St. Stephen : a history of medieval Hungary, 895-1526. London: I.B. Tauris. ISBN   1-4175-4080-X. OCLC   56676014.CS1 maint: multiple names: authors list (link)
  6. "A stable currency in search of a stable Empire? The Austro-Hungarian experience of monetary union". History & Policy. 19 April 2017.
  7. "GLOSSARY". www.rev.hu. Retrieved 10 January 2021.
  8. "An Attempt at a New, Democratic Start: 1944–1946". The Institute for the History of the 1956 Revolution.
  9. Archived 21 February 2009 at the Wayback Machine 1 and 2 forint coins were withdrawn from use from 1 March 2008.
  10. Archived 21 February 2009 at the Wayback Machine The sum of total purchases is rounded
  11. Archived 4 March 2010 at the Wayback Machine The new 200 forint coin
  12. Calling for MNB-tender for public benefit organizations (MNB-pályázat közhasznú szervezetek számára)

Further reading

Preceded by:
Hungarian pengő
Reason: inflation
Ratio: 1 forint = 4×1029 pengő
Currency of Hungary
1 August 1946
Concurrent with: adópengő until 30 September 1946
Succeeded by:
Current
Preceded by:
Hungarian adópengő
Reason: inflation
Ratio: 1 forint = 200,000,000 adópengő