The introduction of the forint
The introduction day, 1 August 1946, was carefully chosen to occur after the harvest and the accumulation of substantial stocks. Name selection triggered debates. The names of libertás, máriás, turul and turán were mentioned, however, tallér was the most popular suggestion. Finally, forint as a gold coin that reserves its value over hundreds of years was chosen. The name forint comes from fiorino d’oro, the gold coin of Florence. The gold coins of King Matthias as well as the Kossuth banknotes in 1848 were also called forints.
When it was introduced, 1 forint was equal to 4×102 simapengő or 200,000,000 adópengő. However, no actual exchange was available. The exchange rate for 1 US dollar was 11.74 forints. Forint was a gold-based currency, just like pengő and korona. The gold reserves that constituted its basis and had been transported to Western Europe were repatriated on 6 August 1946. It was worth HUF 374 000 000. 1 forint was worth 0.0757575 grams of pure gold, i.e. 1 kg gold was worth 13,210 forints.
The first 2-, 10-, and 100-forint banknotes depicted two employees of the Mint, machine operator Mihály Pfeffer, and banknote framer Gizella Várszegi Tőkés Jánosné, along with the symbols of the era, a hammer, wheat, and a sickle. Both banknotes had to be withdrawn from circulation early due to poor paper quality. The next series depicts portraits of important historical figures of Hungary and this tradition continues to this day.
War damage also set back the restart of minting. Since there was no steel available for coin dies, replacement was provided by casting the steel axles of defunct tanks. The 1- and 2-forint coins were made of aluminium, the 10 and 20 fillér coins of an alloy of aluminium and bronze, and the 2 fillér coins of tombak (an alloy of copper and zinc). The silver 5-forint coin was minted and circulated in a limited volume with the title along the edge “A MUNKA A NEMZETI JÓLÉT ALAPJA”, i.e., ‘WORK IS THE BASIS OF A NATION’S WELL-BEING”. 5-forint coins with a reduced silver content were minted in 1947, based on the silver stock of the State Mint, which had been repatriated from Frankfurt am Main after the war.
Banknote circulation per person hardly exceeded HUF 100 until the end of the year. The upper limit of money circulation was set at HUF 1,000,000,000. New prices and salaries were not specified by the market but by the authority.
Lack of goods and hyperinflation was still stopped. The population started to trust the currency again. Currency stabilisation without foreign loans was a success despite all its flaws: it put an end to one of the world’s biggest hyperinflations.
Source: MTVA