The National Currency of Hungary: Hungarian Forint (HUF)
The Hungarian Forint, abbreviated as HUF, is the official currency of Hungary. Issued and regulated by the Magyar Nemzeti Bank—the nation’s central bank—the HUF has been in circulation since 1946. In international financial markets, it bears the symbol ‘Ft’. The currency is available in banknotes ranging from Ft500 to Ft20,000 and coins from Ft5 to Ft200.
Key Highlights:
- HUF is Hungary’s national currency.
- Introduced in 1946, regulated by the Magyar Nemzeti Bank.
- Symbolized as ‘Ft’; internationally recognized by the code HUF.
- Banknotes range from Ft500 to Ft20,000; coins range from Ft5 to Ft200.
- Despite being an EU member, Hungary has not adopted the euro.
Dive Deeper into the Hungarian Forint (HUF)
The Hungarian Forint serves as the national currency and sole legal tender in Hungary. Managed by the Magyar Nemzeti Bank—the nation’s principal central bank since 1924—the Forint’s chief aims are to ensure price stability and manage the currency’s circulation. Denoted by ‘Ft’ in financial exchanges, it frequently trades with major foreign currencies like the U.S. dollar and the euro. Notably, the Forint is unpegged, meaning its value is independently determined by financial markets.
Banknotes are issued in the denominations of Ft500, Ft1,000, Ft2,000, Ft5,000, Ft10,000, and Ft20,000. Coins are available in values of Ft5, Ft10, Ft20, Ft50, Ft100, and Ft200. Banknotes are produced by the Hungarian Banknote Printing Company, while coins are minted by the Hungarian Mint. Previously, one Forint was divided into 100 Fillér, but due to high inflation, these subunits were discontinued in 1999.
Exchange Rate Snapshot:
As of April 2022, one U.S. dollar is equivalent to approximately Ft346.43.
Special Considerations
Despite becoming a member of the European Union in 2004, Hungary has been reluctant to adopt the euro. Current national policies do not provide a timeline for replacing the Forint, partly because national financial authorities view the euro as a potential financial pitfall. Significantly, Hungary’s central bank governor Gyorgy Matolcsy has referred to the euro as a ’trap’ and ‘strategic error.’ The 2007-08 financial crisis and subsequent European sovereign debt crisis further highlighted risks associated with relinquishing national monetary policy control, an option currently avoided by non-euro countries such as Poland, Czech Republic, and Romania.
While some Hungarian merchants—especially larger hotels and retailers—accept the euro, the offered exchange rates are typically less favorable than those found in specialized exchange offices, and change is customarily given in Forints.
Historical Background of the Hungarian Forint (HUF)
The Hungarian Forint has historical roots dating back to 1868, using a different version until 1892. The contemporary HUF was reintroduced in 1946 to stabilize Hungary’s economy after World War II. Its name originates from Florence’s ‘fiorino d’oro’ gold coins minted from 1252 and were a feature of the Austro-Hungarian Empire.
Constant economic fluctuations have impacted the Forint’s stability. Post-World War I economic turmoil, accelerated by the 1920 Treaty of Trianon and substantial territorial and population losses, destroyed much of Hungary’s economic foundation. This was further exacerbated during periods of hyperinflation, reaching extreme levels after the war. The late 1980s transition away from communist rule and the adoption of market economy policies led to variable inflation rates, peaking at 35% during the early 1990s reforms.
Modern Hungary relies heavily on a skilled labor force and maintains robust export relationships with key EU partners such as Germany, Slovakia, and Italy. Key economic sectors include automobile manufacturing and technology components.
From a monetary perspective, the Gross Domestic Product (GDP) in 2020 declined by -4.7% due to the global COVID-19 pandemic, coupled with a 5.1% inflation rate in 2021. Overall, while the Hungarian Forint has a turbulent history, it remains a central element of Hungary’s current financial system.
Related Terms: currency, denomination, monetary policy, exchange rate, inflation, market economy.
References
- Magyar Nemzeti Bank. “FORINT BANKNOTES”.
- Magyar Nemzeti Bank. “Banknotes”.
- Magyar Nemzeti Bank. “Coins”.
- Oanda. “Hungarian Forint”.
- Magyar Nemzeti Bank. “The Central Bank”.
- Global Exchange. “The Hungarian forint”.
- Magyar Nemzeti Bank. “Production of banknotes and coins”.
- FRED Economic Data St. Louis Fed. “National Currency to US Dollar Exchange Rate: Average of Daily Rates for Hungary”.
- European Commission. “Hungary and the euro”.
- Financial Times. “We need to admit the euro was a mistake”.
- European Union. “Countries using the euro”.
- Magyar Nemzeti Bank. “Hungarian medieval gold florin coin series”.
- Business Insider. “The Worst Case of Hyperinflation In History”.
- The American Hungarian Federation. “The Treaty of Trianon: A Hungarian Tragedy”.
- Currency History. “History of hungarian currency”.
- The World Bank, World Integrated Trade Solution. “Hungary Trade”.
- The World Bank. “GDP growth (annual %) - Hungary”.
- The World Bank. “Inflation, consumer prices (annual %) - Hungary”.
