What Is the Hungarian Forint (HUF)?

What Is the Hungarian Forint (HUF)?

Let me tell you directly: the Hungarian forint, or HUF, is the official and national currency of Hungary. It's issued and managed by the Magyar Nemzeti Bank, which is the country's central bank. In the international market, you'll see it represented by the currency code HUF and the symbol Ft. This currency was introduced in Hungary back in 1946. Banknotes come in denominations from Ft500 up to Ft20,000, and coins are minted in values ranging from Ft5 to Ft200.

Key Takeaways

Here's what you need to know upfront. The Hungarian forint is Hungary's national currency. It was introduced in 1946 and is issued and maintained by the Magyar Nemzeti Bank, the central bank. Represented by the symbol Ft and code HUF, banknotes range from Ft500 to Ft20,000, while coins go from Ft5 to Ft200. Even though Hungary is an EU member, it hasn't adopted the euro.

Understanding the Hungarian Forint (HUF)

The forint is Hungary's official national currency, and it's issued by the central bank, known as the Magyar Nemzeti Bank. Established in 1924, this bank handles maintaining the currency's value and controlling its circulation. Their main goals are to achieve and maintain price stability while using monetary policy to support the government's economic policies.

In the foreign exchange market, the forint is denoted as Ft and abbreviated as HUF. It's not pegged to any other currency, and no currencies are pegged to it. The top exchanges for it are with the euro and the U.S. dollar.

Banknotes are issued in denominations of 500, 1,000, 2,000, 5,000, 10,000, and 20,000 forints. Coins come in 5, 10, 20, 50, 100, and 200 forints. These are printed by the Hungarian Banknote Printing Company and minted by the Hungarian Mint. One forint breaks down into 100 fillér, but those coins were pulled from circulation in 1999 because of high inflation.

As of May 2024, one U.S. dollar equals about Ft366.03.

Special Considerations

Hungary joined the European Union in 2004, and there was strong support for it when they applied a decade earlier. But Hungary still doesn't use the euro and hasn't set a date to switch, because the government and central bank are reluctant. The central bank governor, Gyorgy Matolcsy, even called the euro a 'trap' and a 'strategic error.'

Other EU countries not using the euro include Bulgaria, the Czech Republic, Poland, and Romania, though the EU pushes for more integration.

The 2007-08 financial crisis and the European sovereign debt crisis highlighted the risks of the eurozone, where 19 of 27 EU countries use the single currency. By giving up their own monetary policy, countries like Greece and Spain couldn't devalue their currencies to boost growth.

A fast fact for you: while the euro isn't official in Hungary, some merchants like large hotels accept it, but the exchange rate is usually lower than at exchange offices, and change comes in forints.

History of the Hungarian Forint (HUF)

The forint was first used between 1868 and 1892, but the modern version came in 1946 to stabilize the economy after World War II. The name derives from gold coins called fiorino d'oro from Florence, struck starting in 1252, and used in the Austro-Hungarian empire.

The exchange rate has been somewhat stable, but economic uncertainty has affected its value. For example, the 1920 Treaty of Trianon after World War I devastated the economy, with Hungary losing over 70% of its territory and 60% of its population. Five of its top 10 pre-war cities went to neighboring countries. War reparations and lost tax base caused the HUF to lose nearly all value, with inflation peaking at nearly 1,200% annually in 1923.

From 1988 into the early 1990s, Hungary and other central and eastern European countries broke from communist rule. The transition was peaceful but brought inflation and stagnation, with hyperinflation hitting 35% in the 1990s as it shifted to a market economy. Improvements came in the 2000s, but high inflation made the currency non-convertible at times.

Hungary's economy is export-oriented, relying on a skilled labor force. Major partners are Germany, Slovakia, Italy, Romania, and Austria. Key industries include car and parts manufacturing, and components for radios and televisions.

World Bank data shows Hungary had 4.6% GDP growth and 14.6% inflation in 2022, largely from the COVID-19 pandemic fallout.

Does Hungary Use the Euro?

No, Hungary is in the EU but not the euro area, so it doesn't use the euro. It sticks with the forint. There's reluctance to adopt it, and no target date. The EU notes the forint isn't in the Exchange Rate Mechanism, which prevents disruptions to economic stability in the single market.

Is It Better to Use the Forint or Euro in Hungary?

The forint is the only official currency in Hungary; the euro isn't recognized officially. Some businesses, like hotels in major cities, accept euros, but change is in forints, and their exchange rates are often lower than at banks or exchanges.

Can Travelers Use U.S. Dollars in Hungary?

U.S. dollars aren't accepted for everyday transactions in Hungary. If you're traveling there, exchange them for forints, the national currency.

The Bottom Line

Hungary, as an EU member, is one of the few that keeps its own currency instead of the euro. That's the forint, abbreviated HUF in markets. The Magyar Nemzeti Bank handles maintaining it and controlling circulation.