The forint is the official currency of the Republic of Hungary. This decimal currency is divided into 100 subunits called filler, but circulation of filler-denominated currency ended in 1999. The name of the currency derives from the gold coins of Florence minted during the 13th century called fiorino d’oro. The introduction of the forint in 1946 helped to stabilize the nation’s economy after World War II, but a slight hiccup ensued in the 1990s due to the transition to a free market economy. Since becoming a member of the European Union, Hungary has been attempting to meet all requirements necessary to adopt the euro and may do so sometime between 2012 and 2014. In the meantime, the forint is issued by the Hungarian National Bank, formally known as Magyar Nemzeti Bank. The value of the forint has been pegged to the euro since 2008.
The original Hungarian forint was modeled after the Austro-Hungarian florin used in the empire from 1868-1892. In 1926, the pengo was made the national currency until hyperinflation led the majority Communist Party of Hungary to reintroduce the forint in 1946. The success of the forint’s introduction by the Communist Party is credited with their subsequent takeover of total state power. The devaluation of the pengo was so drastic that the forint was introduced at a remarkable exchange rate of 1 forint: 4×1029 pengo. Just before the forint was introduced, banknotes were being issued in denominations of 100 million billion (1×1020) pengo.
Although the Hungarian National Bank, established in 1924, was not able to control the devaluation of the pengo, it did surprisingly well maintaining the value of the forint. Only during the late 1970s and 1980s did the forint begin to depreciate. After the democratic reform of 1990, inflation rose dramatically, but it was brought under control within three years. New reforms were made to the Hungarian National Bank in July 2011, establishing it as an official member of the European System of Central Banks.
The economy of Hungary is extremely stable and anti-inflationary. Recent improvements in production have led to a decrease in consumer demand and increased exports. The Hungarian economy is relatively small but politically and institutionally open. Trade flows smoothly, and many investors have been drawn to Hungary since the country was accepted as a member of the European Union in 2004. Hungary’s demonstrably economic growth has no end currently in sight.