Hungarian pengő
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| Hungarian pengő | |
|---|---|
| Name | Pengő |
| Using countries | Kingdom of Hungary (1920–1946), Second Hungarian Republic, Hungarian People's Republic |
| Subunit ratio 1 | 1/100 |
| Subunit name 1 | fillér |
| Plural | pengők |
| Frequently used coins | 1, 2, 10, 20, 50 fillér; 1, 2, 5 P |
| Frequently used banknotes | 5, 10, 20, 50, 100, 1,000, 10,000, 100,000, 1,000,000 P |
| Issuing authority | Hungarian National Bank |
| Replaced currency | Hungarian korona |
| Replacement currency | Hungarian forint |
| Date of introduction | 1 January 1927 |
| Date of withdrawal | 31 July 1946 |
Hungarian pengő. The pengő was the official currency of Hungary from 1927 until its catastrophic collapse in 1946, representing a turbulent period of economic history. It was introduced to stabilize the nation's finances following the hyperinflation of the Hungarian korona after World War I. The currency's name derived from the Hungarian verb *pengeni*, meaning "to ring" or "clink," evoking the sound of silver coins.
History
The pengő was introduced on 1 January 1927 by the Hungarian National Bank, replacing the severely devalued Hungarian korona at a rate of 12,500 korona to one pengő. This reform was part of a broader stabilization program led by Prime Minister István Bethlen and supported by financial expertise from the League of Nations. The new currency initially brought a period of relative monetary stability to the Kingdom of Hungary (1920–1946), fostering economic growth and international trade during the late 1920s and early 1930s. However, the economic pressures of the Great Depression and Hungary's alignment with Nazi Germany during World War II placed immense strain on the pengő, leading to significant inflation by the early 1940s as the government financed its war efforts through money printing.
Hyperinflation
Following World War II, Hungary experienced the most severe hyperinflation ever recorded, rendering the pengő virtually worthless. The devastation of the war, massive war reparations imposed by the Allies, and the loss of territory from the Treaty of Trianon crippled the economy. The post-war government, led by figures like Zoltán Tildy, resorted to printing money to cover expenditures, causing prices to double every 15 hours at its peak in July 1946. This period saw the issuance of astronomical banknote denominations, including the 100 million b.-pengő (1 quintillion or 10^18 pengő), a unique currency notation. The crisis was exacerbated by the Soviet occupation of Hungary and the economic policies of the emerging Hungarian People's Republic.
Coins and banknotes
Initially, pengő coins were minted in denominations of 1, 2, 10, 20, and 50 fillér, and 1, 2, and 5 pengő, featuring designs that included the Coat of arms of Hungary and images of historical figures like Saint Stephen. Banknotes, issued by the Hungarian National Bank, depicted prominent Hungarian statesmen and cultural icons, such as Francis II Rákóczi and poet Sándor Petőfi. As hyperinflation accelerated, the government issued increasingly high-denomination notes, including the infamous 100 million b.-pengő note, while lower-value coins and bills became obsolete. The design and production of this currency, overseen by institutions like the Budapest Mint, could not keep pace with the plummeting value, leading to stamps and adhesive coupons being used as emergency money.
Replacement and legacy
The pengő was officially replaced by the Hungarian forint on 1 August 1946, at an astronomical exchange rate of 400 octillion (4×10^29) pengő to one forint, as part of a radical stabilization plan engineered by Finance Minister Mihály Kállai and supported by the Hungarian Communist Party. This reform, which included a comprehensive currency reform and new taxation policies, successfully ended the hyperinflation and restored monetary stability. The forint has remained Hungary's currency ever since, through the Hungarian Revolution of 1956 and the transition to a market economy after the fall of the Eastern Bloc. The pengő is primarily remembered as a stark historical lesson in monetary policy and the dangers of hyperinflation, often studied alongside the German Rentenmark and the Zimbabwean dollar.