Hungarian Forint

• Country: Hungary
• Currency: Forint
• AKA: Hungarian forint
• ISO 4217 CODES: HUF/348
• Symbol: Ft

The forint is the modern-day official currency of the Republic of Hungary, though its origins date back as far as the 14th century, when the forint was used in central Europe. The modern incarnation of the forint was introduced under communist rule following the end of World War II, but it steadily eroded in value until the country was able to restore a democratic form of government in 1990. In recent years, the National Bank of Hungary has managed to keep inflation in the single digits. Hungary joined the European Union in 2004 and has intentions to eventually convert its currency to the euro.

Background of the Hungarian Forint

The pengo had served as Hungary’s currency since 1927. Following the end of World War II and the beginning of Soviet dominance of eastern Europe, the pengo became substantially deflated due to an economic phenomenon known as hyperinflation. In an attempt to stay ahead of imminent collapse, the Hungarian government embarked on a trend of printing successively higher denominations of pengo notes, including a 1 sextillion pengo note. The introduction of a new, revalued currency – the forint – rendered the pengo obsolete.

The National Bank of Hungary has utilized a crawling peg method for currency valuation since 1995, and the forint became a fully convertible currency in that same year. Hungary joined the European Union in 2004, and the forint will eventually be replaced by the euro. Recent estimates for the effective date of this conversion have ranged from 2008 to 2015. In the meantime, the forint remains pegged to the euro in preparation for the conversion, as called for under the terms of the Exchange Rate Mechanism (ERM) II.

As of 2004, Germany was Hungary’s largest trading partner, with primary exports consisting of machinery, raw materials, vehicles, manufactured goods, fuels and food. Companies based in the United States such as Ford, General Motors, IBM and Pepsico have also made significant foreign investments in Hungary in the new millennium.

The forint is subdivided into 100 fillér, but due to repeated bouts of inflation, fillér have been eliminated from the currency entirely. Denominations for coins are 1Ft, 2Ft, 5Ft, 10Ft, 20Ft, 50Ft, and 100Ft. Denominations for banknotes are 200Ft, 500Ft, 1000Ft, 2000Ft, 5000Ft, 10000Ft, and 20000Ft.