Hungarian forint

Hungarian forint
Ft
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. Between 2001 and 2022, inflation was in single digits, and the forint has been declared fully convertible. In May 2022, inflation reached 10.7% amid the war in Ukraine and economic uncertainty. As a member of the European Union, the long-term aim of the Hungarian government may be to replace the forint with the euro, although under the current government there is no target date for adopting the euro.

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

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. It was subdivided into 100 krajczár (krajcár in modern Hungarian orthography; cf German Kreuzer).

The forint was reintroduced on 1 August 1946, after the pengő was rendered 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. 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.

The forint replaced the pengő at the theoretical rate of 1 forint = 400,000,000,000,000,000,000,000,000,000 pengő, thus dropping 29 zeroes from the old currency. In reality, with the highest value note being 100 million B. pengő ( pengő), the total amount of pengő in circulation had a value of less than 1⁄1000 of a forint. (The "B" stood for a long scale "billion", i.e. a million million.) Of more significance was the exchange rate to the adópengő of 1 forint = 200 million adópengő.

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.

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.

Country
  • Hungary
    Hungary (Magyarország ) is a landlocked country in Central Europe. Spanning 93030 km2 of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia and Slovenia to the southwest, and Austria to the west. Hungary has a population of 9.7 million, mostly ethnic Hungarians and a significant Romani minority. Hungarian, the official language, is the world's most widely spoken Uralic language and among the few non-Indo-European languages widely spoken in Europe. Budapest is the country's capital and largest city; other major urban areas include Debrecen, Szeged, Miskolc, Pécs, and Győr.

    The territory of present-day Hungary has for centuries been a crossroads for various peoples, including Celts, Romans, Germanic tribes, Huns, West Slavs and the Avars. The foundation of the Hungarian state was established in the late 9th century AD with the conquest of the Carpathian Basin by Hungarian grand prince Árpád. His great-grandson Stephen I ascended the throne in 1000, converting his realm to a Christian kingdom. By the 12th century, Hungary became a regional power, reaching its cultural and political height in the 15th century. Following the Battle of Mohács in 1526, it was partially occupied by the Ottoman Empire (1541–1699). Hungary came under Habsburg rule at the turn of the 18th century, later joining with the Austrian Empire to form Austria-Hungary, a major power into the early 20th century.