What is Hungarian Forint (HUF)?

The Hungarian forint (HUF) is Hungary’s official currency. Hungary’s central bank, Magyar Nemzeti Bank, issues and manages the forint. The forint’s international currency code is HUF, and the symbol Ft. Hungary adopted the currency in 1946. The bank mints coins from Ft5 to Ft200 and issues banknotes from Ft500 to Ft20,000.

Hungarian Forint comprehension

Hungary’s sole currency is the forint. Magyar Nemzeti Bank, Hungary’s central bank, issues it.Established in 1924, the bank manages the value and circulation of the forint. The primary goal is to promote and maintain price stability while supporting federal economic programs through monetary policy.

In the foreign currency market, the forint is known as Ft or HUF. There is no currency peg or any currency peg attached to it. The U.S. dollar and euro are the primary currency exchanges.

Foreign banknotes come in 500, 1,000, 2,000, 5,000, 10,000, and 20,000 denominations. There are 5, 10, 20, 50, 100, and 200 forint coins. The Hungarian Mint mints coins, while the Banknote Printing Company prints bills. One forint equals 100 fillers. In 1999, rising inflation forced the withdrawal of these coins.

Special Considerations

In 2004, Hungary joined the European Union (EU). There was strong support for joining the union when the country applied ten years ago. However, the federal government and central bank are reluctant to embrace the euro, so Hungary hasn’t established a target date for the transition. Gyorgy Matolcsy, Hungary’s central bank governor, called the euro a “trap” and “strategic error.”

Other European nations not using the euro include Hungary, Bulgaria, Croatia, the Czech Republic, Poland, and Romania, despite the EU’s push for economic unification.

The 2007–08 financial crisis and European sovereign debt crisis increased the risks of adopting the eurozone, where 19 of the 27 EU nations embraced the single currency. Countries like Greece and Spain, which lost control of their monetary policies, struggle to discount their currencies to boost economic development.

Hungary doesn’t utilize the euro, but big hotels and retailers accept it. The exchange rate is cheaper than at other exchange offices. Change is usually in forints.

Hungarian Forint history

The Hungarian forint debuted between 1868 and 1892. The contemporary forint debuted in 1946. It aimed to stabilize the economy after WWII. The name refers to Florence’s gold fiorino d’oro coins, first produced in 1252 and used across the Austro-Hungarian empire.

The currency’s exchange rate has remained somewhat constant. However, economic uncertainty has hurt the forint’s foreign currency value. For instance:

• Post-World War I, the 1920 Treaty of Trianon had disastrous economic consequences, resulting in the loss of approximately 70% of land and 60% of the people.
• The bordering nations included five of Hungary’s ten largest cities before World War I. The HUF lost nearly all its worth due to war reparations and the loss of its revenue base. Annualized inflation peaked at approximately 1,200% in 1923.
• From 1988 until the early 1990s, Hungary and other central and eastern European nations split from communism. Due to inflation and stagnation, the changeover was calm. Hyperinflation reached 35% in the 1990s after adopting a market economy. The 2000s saw economic growth despite significant inflation, rendering the currency unconvertible.

Hungary relies on skilled workers for its export-focused economy. Germany, Slovakia, Italy, Romania, and Austria are the main commercial partners. Top industries include automotive and car part manufacturing and radio and TV component production.

According to World Bank data, Hungary saw -4.7% GDP growth in 2020 and 5.1% inflation in 2021. This was mainly due to the global COVID-19 pandemic’s economic impact.

Conclusion

• Hungary uses the Hungarian forint as its national currency.
• Since 1946, Magyar Nemzeti Bank, Hungary’s central bank, has issued and maintained the forint.
• Its symbol is Ft and its currency code is HUF.
• Banknotes are Ft500–Ft20,000 and coins are Ft5–Ft200.
• Hungary is an EU member but hasn’t accepted the euro.