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Entry 219 of 240Economic

The Hungarian Pengő

1946 CE/Europe/Hungary
Today Budapest, HungarySpan Postwar Hungary · 1945–1949

Hungary emerged from the war with its industry wrecked, its capital besieged, and reparations owed to the Soviet Union. It printed. Prices doubled roughly every fifteen hours — the fastest inflation ever recorded anywhere, worse than Weimar by a wide margin. The state issued a note for one hundred million billion pengő and had a larger one printed but never released. When the currency was replaced in August 1946, the entire stock of banknotes in circulation was worth less than a single one of the new coins.

◆ Worth knowingThe replacement currency introduced in 1946, the forint, is still Hungary's money today. It was launched by simply declaring the old notes void — there was no exchange rate worth calculating, because there was no amount of pengő that equalled one forint.
◆ The mechanismMonetary debasement

A money's intrinsic or backed value is diluted to fund obligations; confidence in it erodes, often into inflation.

Also: Debt / credit cycle · Demographic shock & recovery

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