What Is the HUF (Hungarian Forint)?

The HUF (Hungarian Forint) is the national currency of Hungary; the country has not yet adopted the euro (EUR). The forint gets its name from gold coins called fiorino d'oro, which the city of Florence minted in the middle ages.

The forint subdivides into 100 filler, but these particular coins no longer circulate as legal tender. The Hungarian National Bank is the country's central bank. They manage the issuance and circulation of the forint. Paper banknotes of forint have denominations of 500, 1000, 2000, 5000, 10,000, and 20,000 forints. Coins have denominations of 5, 10, 20, 50, 100, and 200 forints.

Key Takeaways

  • The HUF (Hungarian Forint) is the national currency of Hungary; the country has not yet adopted the euro (EUR). 
  • The introduction of the Hungarian Forint (HUF) in 1946 was part of the stabilization of the economy in post-World War II Hungary.
  • According to the European Commission, Hungary is currently preparing the adopt the euro; however, the country does not have a target date for adopting the euro.
  • Both the 2008 financial crisis and the 2012 European debt crisis put into sharp relief the dangers of joining the eurozone, the monetary union of 19 member states of the European Union that have adopted the euro as their primary currency and sole legal tender.

Understanding HUF (Hungarian Forint)

The introduction of the Hungarian Forint (HUF) in 1946 was part of the stabilization of the economy in post-World War II Hungary. The exchange rate of the currency was relatively stable until the country adopted a market economy in the early 1990s. During this time, hyperinflation reached 35%. However, the economy made some improvements in the 2000s. Although at one point, Hungarian inflation was so high, the currency lost its ability to be converted (which is an essential aspect of international commerce). 

History of the HUF (Hungarian Forint)

The Treaty of Trianon, formed at the end of World War I, set Hungary's current borders. Hungary joined the Axis powers during World War II, and at the end of the war, it became a satellite state of the Soviet Union. Between 1949 and 1989, Hungary was the Hungarians People's Republic.

From 1988 and into the early 1990s, many central and eastern European countries—including Hungary—broke with communist rule. The transition, prompted by inflation and stagnation, was peaceful. The first free elections in Hungary were in 1990, and the country sought to become integrated into the rest of Europe during the early 2000s.

In 2004, the European Union (EU) invited Hungary to join. They had applied ten years earlier, and there was significant support for joining at that time.

Hungary and the Euro

Hungary first planned to adopt the euro as its official currency in 2008, but it has consistently decided to hold off. According to the European Commission, Hungary is currently preparing the adopt the euro. However, the country does not have a target date for adopting the euro.

Both the 2008 financial crisis and the 2012 European debt crisis put into sharp relief the dangers of joining the eurozone, the monetary union of 19 member states of the European Union that have adopted the euro as their primary currency and sole legal tender. For example, countries like Greece and Spain have been unable to devalue their currencies to stimulate economic growth.

Other eastern European countries, such as Poland, the Czech Republic, and Romania, have also declined to join the currency union. It is interesting that this is happening at the same time that the European community is seeking more thorough economic integration.

Hungary has a skilled labor force, and it is an export-oriented economy. Its primary trading partners include Germany, Austria, Italy, and France, among others. Industries are varied and include parts for automobiles, radio, and television. The country is the largest Central and Eastern Europe electronics producer. 

According to the 2019 World Bank data, Hungary experiences an annual 4.9% gross domestic product (GDP) growth with a yearly inflation deflator of 4.5%.