The lowdown on the Hungarian forint
The Hungarian forint gets its name from the city of Florence in Italy, where gold coins known as fiorino d’oro were minted from 1252. In Hungary, a gold-based currency known as florentinus was used from 1325.
By the time of the Austro-Hungarian Empire, the currency used between 1868 and 1892 was known as the florin in German and as the forint in Hungarian. From 1892 onwards, the Austro-Hungarian korona was the currency of the empire, until the end of the First World War in 1918 when, as part of the Treaty of Saint-Germain, the Austro-Hungarian Bank had to be liquidated and the korona had to be replaced with a different currency. In Hungary, this was the Hungarian korona.
When inflation rose to serious levels, the korona was replaced by the Hungarian pengő in 1927, at a rate of 12,500 korona to one pengő, and defined as 3,800 pengő to one kilogram of fine gold. The American Great Depression of the 1930s affected Hungarian agriculture and worsened the country’s debt, as did the onset of the Second World War.
By 1945, the pengő had suffered the highest rate of hyperinflation ever recorded, and had become basically worthless. The only way to save the Hungarian economy was to introduce another new currency: the Hungarian forint that’s still in use today. On 1st August 1946, the forint was introduced at a rate of 400,000,000,000,000,000,000,000,000,000 (that’s 400 octillion!) pengő to one forint, dropping 29 zeros from the old currency. The gold exchange rate was set at 13.21 forint per gram of gold.
A look back at British pound to Hungarian forint rates
Until 1972, the Hungarian forint steadily traded at a value of around 144 forint to the British pound. Over the next decade, the forint saw an increase in value, climbing all the way to 55 forint to the pound by 1987.
After the collapse of the Soviet Union in the early ‘90s, the former eastern bloc had to begin the transition from a planned economy to a market economy. Hungary lost nearly 70% of its export markets in Eastern and Central Europe, and the value of the forint began to tumble. In 1991, the forint was valued at 100 to the pound, continuing to fall to 200 by 1995, 300 by 1997, and 400 by the year 2000.
By 2001, the forint eventually began to stabilise and was declared fully convertible. Its value hovered below 400 forint to the pound, continuing up until the world financial crisis of 2008 hit.
Hungary’s economy has been showing signs of recovery since 2011, although the forint has been steadily rising against the pound once more, climbing back over 400 forint to the pound by the end of 2014. This is great news for your pounds however, meaning you’ll get more forint for your money than last year!
