The Hungarian pengo was Hungary’s official currency from January 1, 1927, until July 31, 1946. ItsiIntroduction is part of a stabilization program after World War I, the currency takes the place of the korona and subdivides into 100 filler. The Hungarian pengo got its name from the term “peng” which is an onomatopoeic word that corresponds to the word “ring” in English. The term comes from the 15th – 17th century when referring to silver coins that create a tinkling sound when hit on a hard surface.  

Hungary 500,000 Korona | 1923 | P-79br | Source: Banknote World Educational

Hungarian Pengo Experiences Inflation

Following World War II, the Hungarian pengo lost its value after experiencing the most severe case of hyperinflation in history, worse than that of Germany after World War I, Yugoslavia in 1992, and even more serious than that of Zimbabwe between 2004 and 2009. Hungary wasn’t new to hyperinflation. Prior to World War I, 5 Hungarian Kronen was equal to 1 US Dollar. However, in 1924, the krone dramatically drops to 70,000 against the USD which is why the Pengo replaces it.  

Hungary 100 Million Pengo | 1946 | P-124 | Source: Banknote World

In 1944, around 90% of Hungary’s industrial facilities were damaged when the country became the seat of war between Germany and Russia. Because of the decline in production, the prices of goods were skyrocketing. However, prices kept going up and were unmanageable. At the peak of inflation, the price increase rate was at about 150,000% a day. As an attempt to slow down inflation, Hungary implemented a 75% capital levy in December 1945 to no avail. Next, the Adopengo was launched at the beginning of 1946, initially as an accounting unit for budgeting.  

Hungarian 100 Million B. Pengo | 1946 | P-136 | Source: Banknote World Educational

Rise of the Forint (Present)

The adopengo became legal tender from July 8, 1946. It is part of an experiment to retain its worth with the pengo losing its value. Still, the temporary currency unit didn’t withstand inflation which would prompt the introduction of a new currency. On August 1, 1946, the pengo is replaced by the Hungarian forint at the rate of 400,000 quadrillion pengo to the new currency, removing 29 zeros from the pengo. 

Hungarian 1 Milliard B. Pengo | 1946 | P-137 | Source: Banknote World Educational

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